Online tax ruling boosts accountants


A cottage industry of accountants, tax consultants and software companies is rising up to reap the benefits of a US Supreme Court ruling that opens the door for states to levy taxes on internet sales by companies located in other places.

According to a Financial Times article, the June 21 US Supreme Court ruling threatens to squeeze the often-thin profit margins of online retailers that have enjoyed the competitive advantage of tax-free pricing since the early days of the internet, but it represents a boon for accounting services providers.

An ecommerce business with annual revenue of $300,000 to $500,000 could face an upfront cost of $20,000 and annual expenses of $5,000 to $10,000 to collect sales tax from customers in various states, said David Pope, an accountant in Wyoming who works with internet retailers.

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