Why Shopping Online Just Got More Expensive

Do you enjoy shopping online? It’s quick and painless, right?  And a lot of times we can find cheaper deals online, and it’s a great way to get gifts and last-minute purchases without the hassle of waiting in line and fighting traffic. Well, that may all change with the new ruling from the Supreme Court.

The Court decided that online businesses need to pay taxes for every city, county and state where their customers live. Some states have complained that businesses like Wayfair that do not have a brick and mortar building in a specific state are cheating others out of consumer tax. And the Court agreed.

How does this affect you as a shopper? Well, let’s tell it from the business end. Take Kellan Publishing, for example.  We are an online-only business located in the Greater Seattle, WA area but our bookstore customers are from all over. This means we will need to have tax charged for each and every city, county and state within the nation. The cost of your purchases will go up depending on the tax you pay where you live.

This also means, business owners will likely increase the cost of their products to make up for the extra (and fluctuating) tax costs. Some may need to hire more personnel to deal with the extra accounting.

And this means the cost increase will be handed down to the consumer: YOU.

The Supreme Court ruling tries to make it seem like it will only affect big business owners, but this is simply not the case. True, it states that this new tax law only applies to companies with $100,000 or more in sales per year. However, it also states it will also apply to companies (or individuals) who have 200 or more unique sales per year.

online-shopping-msnLet’s do the math. Most of our books sell for around $3.99 (digital copies). So, $3.99 X 200 = $798. That’s a far cry from the $100,000 minimum. However, that $3.99 is further broken down because there is a fee to pay the bookstore host, the Paypal fee, and then what’s left after that is split 50-50 with the author. So, on average, KP only makes about $1.50 for the sale (not counting overhead costs of course). Most business, such as Kellan Publishing, need to make more than $800 a year to stay in business, right?

Now, there will be more costs for businesses to get and set up programs to determine the differing tax rates (which are always changing and will constantly need updates) not to mention any tax headaches come each January. Smaller companies, like us, will need to increase the cost of our products just to stay in business.

Unfortunately, this cost will be passed to all online shoppers in every type of product whether you are buying books, camping equipment, clothes or movies. And, you will find a discrepancy on what you pay for products compared to others. For example; you may pay $5 for an item, but someone from another state may pay $4.50 because their tax rate is cheaper.

Learn more of the Court’s ruling specifics here.

We at Kellan Publishing value you as our customers and wanted you to be aware of how this new ruling will affect all of your online shopping, not just with us. Right now we have not determined what or how much of an increase we need to put on our books. However, it is most likely we will be raising our prices soon to accommodate the new law.

Thank you for your understanding.

Kelli Ballard Owner/Publisher

Kellan Publishing

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