Employee of the Month – May 2013
May’s office Employee of the Month is Customer Service’s very own Returns Coordinator, Denise Russell! Denise has been with the Online Stores family since October of 2008, coming here right after getting her Associate’s Degree in Accounting at Westmoreland County Community College.
As the Returns Coordinator, Denise is responsible for ensuring that customer returns and exchanges are processed quickly and efficiently, in addition to issuing Merchandise Return Labels (MRLs) by the end of each business day. She was nominated for her flexibility in her department, and her eye for detail. Her communication between other members in her department, and with customers is very commendable. Not to mention her attendance record and positive attitude toward the company are top notch!
Thank you, Denise, for your outstanding work!
Employee of the Month – May 2013
Online Stores, Inc. is recognizing Jenni Gongaware from the warehouse for a third time! Jenni has been with the company for eight years this month and is continually putting in the effort to make this company run as smoothly and efficiently as possible.
This most recent award status spawns from Jenni’s outstanding reorganization of our United States Flag Store. It was no easy feat. In addition to the reorganization efforts, her management of the eBay replenishment project was completed in an organized and timely manner so that these items could be listed much quicker for our customers to enjoy.
Jenni is quite known around OLS with her cheerful attitude and “get down to work” ethics. She surely commits to her tasks at hand, and motivates those around her to excel, as well.
Thank you, Jenni, and congratulations!
PA Senator Pat Toomey Responds to OLS
Though many businesses have expressed distaste for the Marketplace Fairness Act to the Senate, Online Stores, Inc. was shocked to hear that the bill was passed on May 6, 2013. Pennsylvania Senator Pat Toomey voted against the bill and replied to CEO, Kevin Hickey’s personal letter of the bill’s negative impact stating:
May 9, 2013
Dear Kevin,
Thank you for contacting me about the Marketplace Fairness Act (S. 743). I appreciate hearing from you.
As you may know, on May 6, 2013, the Senate passed the Marketplace Fairness Act by a vote of 69-27. Among its provisions, this measure would enable state governments to levy sales taxes regardless of whether the transaction occurs in a physical store or online. I voted against this legislation because I am concerned that many difficult issues relating to this policy have not been addressed. While I understand the concerns that many retailers in my state have raised about online sales, I also have heard the concerns of online retailers who would be subject to the thousands of tax jurisdictions across the country. Moreover, in my view, the legislation’s small business exception of $1 million in revenue is too low and many mom-and-pop retailers could get swept into this costly new tax regime.
Establishing a new online sales tax system across the country is a very significant, complicated proposal. It has the potential to impact almost every American consumer and our entire retail industry. In my opinion, such legislation should first come before the Senate Finance Committee and receive public hearings and careful vetting before being considered by the full Senate. Unfortunately, S. 743 was rushed to the Senate floor without the benefit of such committee hearings or vetting. Also, my colleagues and I were not allowed to offer amendments and try to improve the legislation during Senate debate.
Currently, S. 743 is pending before the House of Representatives for further consideration. As the legislative process continues, please be assured that I value your input and will keep your views in mind should the Senate revisit this matter.
Thank you again for your correspondence. Please do not hesitate to contact me in the future if I can be of assistance.
Sincerely,
Pat Toomey
U.S. Senator, Pennsylvania
Pennsylvania Senator, Bob Casey who voted in favor of this bill, has yet to respond to Online Stores concerns after multiple requests.
See also:The Cost of Complying with the Marketplace Fairness Act
See also: OLS Sends Press Release About Negative Impact of the Marketplace Fairness Act
The Cost of Complying with the Marketplace Fairness Act
With the decision to pass the Marketplace Fairness Act drawing closer, Online Stores Inc., has determined that the costs to comply with the proposed bill is going to be exorbitant for small businesses. OLS has sat down and deciphered just how much it is going to cost in the first two years of implementation.
Several different costs will be associated with the passing of the new bill. Among these costs include management time to review the obligations, create an execution plan and determine how to monitor, the purchase of the software, set up and maintenance fees, and fees per transaction, just to name a few! All of these costs begin to accrue and after just one year, OLS has estimated its costs to be over $360,000!
Please see the attached spreadsheet outlining more specifically costs that OLS is expecting to endure with this passing bill:
Online Stores cost of sales tax compliance
See also: The Effect of the Looming Marketplace Fairness Act on OLS
See also: Online retailers call Internet sales tax a ‘nightmare’
OLS Sends Press Release About Negative Impact of the Marketplace Fairness Act
FOR IMMEDIATE RELEASE May 1, 2013
Marketplace Fairness Act May Cost Over 200,000 Jobs
Online Stores, Inc. calculates how the new Marketplace Fairness Act will impact small eCommerce businesses.
New Stanton, PA—With the Marketplace Fairness Act passing through the Senate, Online Stores, Inc. has determined its cost of compliance with the sales tax laws of all 50 states and the likely impact on other small online retailers. If this bill passes Congress and become law, we estimate our cost of compliance will be $360,000 on sales of $30m in the first year. This amount is greater than our average net profit over the last 3 years. We estimate the net additional sales tax revenue we’ll collect,will be less than our cost of compliance. We believe the impact of this law on small to mid-sized retailers will result in the closure of over 9,000 companies with the loss of 200,000 jobs.
Online retailing is a very competitive business and net profit margins are typically low in the -4% to +5% range, driven by the market leader, Amazon, which is running at only 1% net profit. Companies are investing in website technology to support mobile commerce, compliance with credit card security rules, faster delivers and better customer service. The compliance cost in the first year of implementation of the Marketplace Fairness Act, according to Online Stores, Inc.’s calculations, will be greater than the average level of profitability for companies under $10 to $20m. It also adds a very significant burden to management, taking time and resources away from competing against larger competitors. For smaller companies, and even some larger companies, The Marketplace Fairness Act will cause chaos. We estimate that approximately 9,600 companies will fail, including almost 30% of companies under $10m in sales. That equates to 228,000 lost jobs in at online retailers, catalog companies and any company that operates a retail website. The estimate does not include loss of employment at suppliers, shipping companies and service providers, such as accountants and software developers.
“We think this is an undue burden on smaller Internet retail businesses.” said Kevin Hickey, CEO of Online Stores, Inc. “State sales tax is very complicated, for example there are over 140 conflicting and overlapping codes for clothing and footwear alone. Knowing which items are taxable and at which rates often goes to “case law” based on sale tax appeals and can change at any time for any state. In addition, shipping charges may be taxable, non-taxable, taxable based on order value, amount of handling fees added, percentage of taxable items ordered or which shipping method is selected to quote just a few examples from different states!
If we get the classification of a product wrong and we do not charge sales tax correctly, the states have Draconian power to make us pay all the uncollected taxes with penalties and interest, in some situations making the company directors personally liable
This law will be a major burden for a large number of companies, and will be a major impediment to new company formation. Who wants to start a business and file sales tax forms for 45 states from day 1?”
Online Stores estimates that Avalara, the market leader in sales tax calculations, will need to bring over 20,000 new customers online to collect sales tax in 30 to 60 days to support the 90 days advance notice period proposed. Many small Internet retailers are using the Yahoo Store shopping cart, which isn’t designed to collect sales tax for all states or to link to sales tax software such as Avalara. These companies will be forced to switch to a compatible shopping cart in a very short time frame, or risk being penalized for not collecting, or worse, go out of business.
Online Stores suggests exempting businesses with sales under $50m, since the tax revenue collected will be less than the cost of compliance. In addition companies should be allowed at least 12 months’ to comply with the sales tax collection requirements.
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About Online Stores, Inc.
Online Stores Inc. is an eCommerce company based in New Stanton, Pennsylvania, with 2012 sales of $30 million. The company was founded in 2002 and operates five stores: United States Flag Store http://www.united-states-flag.com, English Tea Store http://www.englishteastore.com, Discount Safety Gear Store http://www.discountsafetygear.com, Safety Girl Store http://www.safetygirl.com, and Construction Gear Store http://www.constructiongear.com. The company is privately owned and employs approximately 80 people.
For further information contact
Kevin Hickey
CEO
Online Stores Inc.
724-925-5627 or 724 493 9212
See Also: The Effect of the Looming Marketplace Fairness Act on OLS
Reuters ran the above press release: http://www.reuters.com/article/2013/05/06/onlinestores-fairness-idUSnPNPH07546+1e0+PRN20130506
