I know what you’re thinking, “how can there be a ‘pro‘ to a tax?” But that’s all the more reason why this might surprise you. Since the internet sales tax is a state tax (not a federal tax), there are some regional differences that actually provide tax breaks in other areas.
Pro: Provides funds for the state
When the state government has a new form of income, it lessens or lowers the cuts to public services. Public services, generally speaking, provide a value to the area you’re living in especially where concerns of safety or health arise. Not cutting funding to those projects ensures that either A) they continue to thrive or B) you aren’t needed to be taxed a greater amount to keep them alive.
Of course, you may wonder, aren’t I being taxed more anyway due to the internet sales tax? Not necessarily.
Pro: Prices don’t always go up
Contrary to popular belief, prices don’t necessarily go up. Many businesses simply leave their prices stagnant and take the money out of their profits. While it’s arguably a bad thing, it can mean lower taxable income while maintaining business as usual.
Con: Hindering free market forces
This is an area that many small business owners take issue with. Companies that have the clout to absorb a sales tax price hike have an unfair advantage over those small businesses that can’t. For some, this isn’t just a matter of encouraging entrepreneurs, but some find this hinders free market forces and is against the American state of mind.
Con: More tax hassle
This is more of a personal point for business owners, but it’s worth mentioning. Some people understand it’s a new tax, they may not agree with it, but are willing to accept it. One of the issues they take however is that it adds yet another factor and form they need to account for.
New tax and accounting laws are passed frequently, but when they are it can be difficult to keep up. After all, not accounting for internet sales tax is punishable as fraud despite some people simply being negligent as it was not a factor beforehand.
With this in mind, it is one of the reasons it’s important to have an accountant on top of current tax codes and laws to ensure your business is prepared and not innocently committing a crime.