Ecommerce entrepreneurs face significant challenges operating independently, particularly concerning online sales tax regulations. This episode highlights the formation of the Online Merchants Guild, a non-profit organization created by sellers for sellers, to collectively address complex issues like sales tax nexus, which Amazon leaves to individual sellers. It’s a call to unity for merchants to fight against potentially ruinous legal and financial threats.
Key takeaways
Understand that sales tax nexus is complex and varies by state; don't assume Amazon handles it for you.
Recognize the potential legal and financial risks of non-compliance with online sales tax regulations.
Consider joining merchant advocacy groups like the Online Merchants Guild to collectively address industry-wide challenges.
Stay informed about landmark cases like Wayfair, as they directly impact online sales tax obligations for ecommerce businesses.
Be aware that Amazon often disclaims responsibility for sales tax, pushing the burden onto individual sellers.
The episode mentions states targeting individual sellers due to Amazon's leverage, highlighting the vulnerability of smaller businesses.
As ecommerce entrepreneurs we are used to doing things on our own, with many of us even starting out as solopreneurs. This isolation, and the ability to control our time as a result, has been very attractive for us for a long time. But more recently this very same disconnectedness can lead to our own ruin. One of the issues that rattle us to the bones is online sales tax. States have been salivating on the billions of dollars they could get from online sales and ecommerce steadily grew. They went after the online platforms we sell our products on, especially Amazon, but Amazon has proven to be a big gorilla to fight especially with their ability to create thousands of jobs as leverage against states. And so some states turned their attention to the ones they can easily intimidate: us individual sellers. Amazon claims ownership of most of everything--customers, listings, even prices--but unsurprisingly sales tax is not one of them. It's up to us to handle sales tax, and everything is so complicated that many of us are not sure what exactly is the right thing to do. Many states even disagree among themselves about sales tax nexus. But still, some sellers have begun receiving letters about this in some states, and it's definitely not a good position to be in. This is one of the reasons Online Merchants Guild was born. This nonprofit was created by ecommerce sellers for ecommerce sellers, with the goal to have as many members as possible so that we can collectively fight against issues that are too big for any one of us to fight. In this episode I talk to Bernie Thompson, an 8-figure seller and member of Online Merchants guild, and Paul Rafelson, a lawyer and law professor working with the likes of GE, Microsoft and Walmart. Below is an overview of what we discussed: How Online Merchants Guild was founded Sales tax nexus and how complicated it is The Wayfair case Constitutional principles violated by
