We’ve taken issue with Tax Cloud/Fed Tax and their CEO David Campbell before. Campbell has repeatedly made misleading statements to the public, to the media and to elected officials about the capabilities of his sales tax software and the impact of the MFA. You can read more about that here and here.
Tax Cloud/Fed Tax, Avalara and other CSPs (Certified Software Providers) stand to make billions of dollars if MFA/MITFA gets rammed through. They know that if the MFA passes, it will impact an enormous number of small businesses and they are rooting for just that so they can profit off the ensuing burdensome regulations.
The problem is, up until now, proponents of the MFA – including the Certified Software Providers – have grossly (and we would argue, purposely) understated the real number of individuals and small businesses that would be ensnared and impacted by the MFA so they can convince lawmakers that it will only hurt a small number of small businesses. Proponents have been coy (at best) and downright dishonest (at worst). Some have even suggested it will only affect a thousand retailers (that is the downright dishonesty we’ve been talking about).
Nevertheless, the veil has slipped. A promotional video by Tax Cloud was recently uncovered by Rick Smith of MarketplaceFairnessCoalition.org. In the video Tax Cloud / Fed Tax admit the real impact of the MFA:
“Between 350,000…and 3.5 million retailers will be impacted by the new law ….”
Tax Cloud also suggests a potential windfall for their business:
“…an opportunity of 1.3 billion dollars for Fedtax.”
Once the video was discovered, Tax Cloud pulled it from the web and they have filed DMCA takedown notices against parties that repost it. But that won’t work. The cat is out of the bag. You can read the full transcript of the video and watch the clip in question here.
We have made countless calls to lawmakers over the past two years and even visited personally with many of them. In many of those meetings they’ve said that proponents, including the certified software providers, told them that the legislation would only affect a thousand retailers or so.
Please use the Tax Cloud transcript when you go and visit or call your representatives about this issue. It is quite compelling to show what proponents are admitting when they think nobody is paying attention.