Let the State Audit Bonanza Begin

This insightful article is a wake up call for small business owners.  The Marketplace Fairness Act opens up the floodgates for auditors. Important quote from the article:

There is no protection whatsoever for sellers that make honest mistakes. If a Mississippi retailer selling into California mistakenly types a 6 instead of a 7 when entering an item code and collects a lower tax rate for the California Board of Equalization (yes, they really call it that) than it should have, that retailer is subject to the full audit and enforcement authority of the kind and gentle folks from Sacramento. If a Texas retailer selling specialty coins into Colorado mistakenly thought that its item was exempt from Colorado sales tax (as “coins” and “precious metal bullion” are, while certain types of paper money and tokens are not) and failed to collect it when the sale was made, they are legally liable and will have to deal with their good friends from Denver.

You can read the full article here.

This bill is really scary for online retailers. Perhaps the biggest threat to ecommerce are the audits. Still not convinced? Read this article about personal liability for simple mistakes.