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E-commerce bill remains stalled, controversial

Heat Transfer Warehouse in Fargo uses the Internet to sell materials used to make logos and other graphics that are tranferred to textiles. Dave Olson/The Forum1 / 2
Kirk Anton, owner of Heat Transfer Warehouse, is seen here at his business in Fargo. Anton says any legislation that would require e-commerce businesses to collect sales taxes must be written carefully so as not to unduly burden small business owners. Dave Olson/The Forum 2 / 2

FARGO — Kirk Anton's business, Heat Transfer Warehouse, is going great guns, but e-commerce legislation currently stalled in Congress has him and other online sellers in the Fargo area worried.

Anton said he'd be happy if the latest version of the Marketplace Fairness Act remains in limbo, but he's resigned to the likelihood that the bill, or something like it, will pass some day.

If that happens, Anton said he hopes lawmakers "craft something that makes sense."

Anton said his views are shared by other area e-commerce sellers who meet regularly to talk about shared concerns.

The Marketplace Fairness Act would grant states the authority to compel online and catalog retailers, known as remote sellers, to collect sales tax at the time of a transaction.

Under the bill, states would only be granted that authority after they have simplified their sales tax laws.

In addition, remote sellers who have gross revenues of less than $1 million would be exempt from the law, a provision aimed at protecting small businesses from potential costs.

Anton said he would like to see the exemption threshold raised to $20 million.

Anything less, he said, could still create crippling costs for small businesses like Heat Transfer Warehouse, a company he started five years ago that sells materials to companies that in turn use those materials to transfer logos and other designs onto clothing and bags.

U.S. Sen. Heidi Heitkamp, D-N.D., a co-sponsor of the latest version of the Marketplace Fairness Act, is on record as stating small businesses needn't fear the bill, as it requires states to provide software free of charge to make collecting taxes in each state as easy as possible.

"Leveling the playing field for our brick-and-mortars across North Dakota has been a top priority for me since I served as tax commissioner in the early '90s," Heitkamp said, adding that back then some mom-and-pop stores were forced to close because customers would seek their help at the counter, but order the same product tax-free from catalogues based out of state.

"Unfortunately, we're experiencing the same problem today — except this time, it's out-of-state businesses who conduct transactions online who have the leg up over Main Street ones," said Heitkamp, who vowed to continue looking for opportunities to move the e-commerce legislation forward.

Greg Danz, who owns Zandbroz Variety, a Fargo brick-and-mortar store, thinks Heitkamp has it right.

Danz has spoken out on the subject of e-fairness in the past, but he said he's becoming disheartened by the lack of progress when it comes to legislation.

"I'm a bit burned out on it," he said, adding that the last time a bill came close to passing, "it got beat by lobbying."

Nonetheless, he said he hopes something will change.

"I have to tax people every day in my store and it still seems pretty unfair they can go buy that book or bottle of lotion on the Internet and not pay taxes," he said. "It just seems to be a disadvantage for people who are part of the community and happen to have bricks and mortar stores."

Anton, who sells to all 50 states and Puerto Rico, remains convinced that having to collect taxes from the multitude of tax systems across the country will hurt his bottom line.

"It's not going to be easy, because it's every municipality," said Anton, who suggested that given the way commerce is done these days, owners of conventional stores may want to consider adding an online component to their business.

"They have the same opportunity to sell e-commerce," he said. "That's just the way things are going."

Dave Olson
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