MOM & POP MAYHEM

Court deals online sellers tax blow

Millions of mom-and-po ponlinesellers could find their business in chaos following the Supreme Court ruling on Thursday that allowed states to force them to collect sales taxes no matter where their customers live.

The 5-4 decision changed 50 years of the status quo that exempted sellers fromcollecting sales tax onout-of-state transactions.

“It creates a layer of complexity and confusion for these companies,” said Nii Ahene, chief operating officer of CPC Strategy, an online consulting firm.

Amazon seller Joseph Zigelboum, who runs a skin care business on Amazon, said he has been paying state sales tax in New York and Pennsylvania and already speaks with his accountant nearly every day.

“I can’t imagine the kind of chaos that’s about to happen when we have to collect taxes for all 50 states,” he said.

The Supreme Court ruling can affect hundreds of thousands of third-party sellers on Amazon.

At the end of the first quarter, 52 percent of all units sold onthee-commerce giant’s site were made by third-party sellers.

In all, Amazon reported $32 billion in third-party sales in 2017 — up from $23 billion the prior year.

The Supreme Court suit was brought by South Dakota, which claimed it was being robbed of millions of dollars in sales tax because internet sellers shipping to the state were not collecting sales tax.

The decision will force the business to collect the sales tax — and many could struggle to comply with the cumber some laws to stay on the right side of the fence.

While retailers could take a hit, companies that sell sales tax compliance software — like TaxJar and Avalara — were big winners on Thursday.

Shares of Avalara, which went public last week, closed up 14 percent, to $51.50— or more than double their $24 IPOprice.

Meanwhile, privately held TaxJar “heard from a ton of current and prospective customers whoareconcerned about what this really means,” said Chief Marketing Officer Lizzie Greenburg.

“Theyare popping the champagne at Avalarar and TaxJar today,” said Robert Steiner, an e-commerce consultant.

Meanwhile, shares of e-commerce heavyweights were down, including Amazon, by 1.3 percent, to $1,730.22, Wayfair by 1.6 percent, to $114.28, Shopify, by 4.5 percent, to $164.54, and eBay, by 3.2 percent, to $38.01.

“Wall Street definitely thinks this will have a negative impact on e-commerce companies,” said CPC Strategy’s Ahene.

Traditional retailers hailed the decision as a big win

“This ruling clears the way for a fair and level playing field where all retailers compete under the same sales tax rules whether they sell merchandise online, in-store or both,” said National Retail Federation President and Chief Executive Matthew Shay.

Financial analyst Eric Beder estimates that he saved $150 when he bought a newlaptop five months ago.

“If I’d waited there would be no savings after today,” Beder said.