The Supreme Court ruling and small online retailers

Even tiny online like Pegasus Ventures will make it!

People sometimes call to check on orders on the Pegasus Ventures online store¬†prepared with their long confirmation number or the order number looking for information. Problem is Pegasus Ventures just ain’t that big and one almost hears the customer stumble when asked for their name.¬† Rather unusual question in today’s online world.

For Pegasus Ventures and online sellers like us it’ll be okay and this ruling, so far, has no impact whatever on the business model. The really small online sellers remain untouched.

California took efforts in the Great Recession to get us to collect and remit sales taxes through distributors, so this ain’t all that new. The paperwork wasn’t fun but we never met their thresholds as they went after Pegasus Ventures through distributors. While the recent Supreme Court ruling changes the landscape for the larger online sellers, smaller companies really see no impact for now.

Jurisdictions requiring collection of sales taxes generally have thresholds the smaller sellers never meet requiring registration or collection of sales taxes from customers. The Supreme Court case brought by South Dakota requires registration when an online retailer hits 200 orders or $100,000 in sales in that state. Each jurisdiction generally has it’s own requirements and the requirements apply solely to orders in each state rather than accumulation of all jurisdictions.

Expect public opinion to pay a role. The little Ebay or Etsy seller, along with smaller online outfits like Pegasus Ventures, make bad targets and jurisdictions likely keep their thresholds for collections and registration. The public seeing the smallest business put through thousands of filings won’t fly.

Yes, the media shares potentially shocking stories of small business getting hurt. Yet think of the the cost to force thousands, if not tens of thousands, of new businesses into state and local data collection systems to collect a few dollars. No one wants that nightmare as the cost of collection ends up exceeding the revenue generated.

As this washes out the ending of the uncertainty in our business model may end up benefiting companies like Pegasus Ventures by carving out a place for us written into law as jurisdictions make choices in this area.

For now no change for Pegasus Ventures and we’ll wait and see as the issue develops!

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