Small firms await sales-tax clarification

programs retailers use to process sales transactions. The software sellers determine the correct sales tax rate and submit payments and reports to tax authorities.

Retailers who sell through Amazon. com can also have sales tax collected, although many don’t on out-of-state transactions. Amazon itself long resisted collecting sales tax but now does so nationwide on its own merchandise. Some of the smaller sellers say their overhead will increase if Quill is overturned.

“It is going to be a process, and frankly, it would affect the bottom line of the company,” says Dave “Lando” Landis, owner of Rocker Rags, an online seller of clothing with photos and logos of rock musicians. The company, based in Albuquerque, gets a small percentage of its sales from out-of-state customers.

Landis uses e-commerce software and expects to link it with a sales tax program if he must start collecting taxes in other states. “Should we be required to, we’ll be on it extremely quickly,” he says.

Adrienne Kosewicz pays $3,300 a year for tax collection software to handle payments and reports to her home state, Washington. Her Seattle-based online business, Play It Safe World Toys, sells through Amazon, which handles computation and collection. “When you expand your reach, costs often come with it. That’s business,” she says.

Though some retailers aren’t daunted by the effort required to collect taxes, the potential for complications is clear, said Bill McClellan, vice president for the industry group Electronic Retailing Association.