Brad Scott of Prescott tells U.S. House members about the stress of Wayfair compliance
PHOENIX, March 3, 2020—An Arizona small-business owner was given a national forum, today to tell members of Congress about his small business’ challenging experience with the difficulties of complying with the online sales tax laws of multiple jurisdictions throughout the United States.
Brad Scott, owner of Prescott-based Halstead Bead, Inc., an NFIB-member wholesale jewelry supply company with customers across the nation, told members of the United States House Committee on Small Business’ Subcommittee on Economic Growth, Tax and Capital Access, that he has considered closing his doors due to the stress and liability of complying with online sales taxes in the wake of the Wayfair decision.
“We’re trying to navigate the landscape with a single accountant,” said Scott, who estimated he has spent $182,000 on software and other costs just to collect $80,000 in taxes for various states. “The expectation that one person can bring a company into compliance as effectively as an entire department at a major corporation—I am that one person, and I can tell you it’s impossible.
“One cannot stress enough the anxiety caused by receiving one notice from a revenue department, let alone 36 … One of those notices, from the state of Tennessee, was over $38.22 in penalties and interest due to the failure to report by our software company.”
Scott also detailed problems with states that have sought to alleviate some of the headache by forming a pact aimed at streamlining the collection and remittance of online sales taxes, and like other small-business owners testifying, called on Congress to step in with one uniform, national standard for remote sellers to collect and remit taxes from online sales.
Chad Heinrich, NFIB’s Arizona state director, called Scott and his wife, Hilary, two of the most articulate spokespeople for the cause in the entire nation. “Hilary and Brad Scott have become first-hand experts on the problems with collecting sales taxes on items sold to out-of-state consumers. Small-business owners across the nation will owe them a debt of gratitude when a solution eventually comes through.”
For years the U.S. Supreme Court’s Quill Corporation v. North Dakota decision prohibited states from taxing the online sales of businesses that didn’t have a physical presence in the state of a purchaser. But another U.S. Supreme Court decision in 2018, South Dakota v. Wayfair, overturned Quill, allowing online sales to be taxed if a business establishes an economic presence through a minimum number of transactions or amount of total sales.
Keep up with the latest Arizona small-business news at www.nfib.com/arizona and follow NFIB Arizona on Twitter @nfib_az.
For more than 75 years, NFIB has been advocating on behalf of America’s small and independent business owners, both in Washington, D.C., and in all 50 state capitals. NFIB is a nonprofit, nonpartisan, and member-driven association. Since our founding in 1943, NFIB has been exclusively dedicated to small and independent businesses and remains so today. For more information, please visit nfib.com.
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