If a state the business doesn’t operate in imposes the requirement to collect sales tax on your business out of state, you do have a multitude of costs and issu

If a state the business doesn’t operate in imposes the requirement to collect sales tax on your business out of state, you do have a multitude of costs and issues as a small business. If the federal government wished to circumvent this with a VAT split amongst the states, that is one thing, both sane and constitutional in the face of this, but this invites a mess. First, if you are required to possess a sales tax license with that state, and potentially municipalities or jurisdictions within the state that require the fees and paperwork yearly, there is one huge cost, both in time and fees. No software will absolve your liability of this if you mess it up or dont pay the fees, you as the business own it. If you are required to file monthly or quarterly statements with the state along with any remittances, there is time and costs there. File late, file incorrectly, fees and interest on top of the tax obligation. Refuse or forget to pay the tax to a jurisdiction in backwater Alaska, time and money to wrestle with tax auditors from another state if they pursue action. How will the states negotiate auditors and tax authorities stepping all over eachother within their jurisdictions. Need to purchase extra services to juggle the spiderweb of compliance, reporting, and remittance issues, there is also more cost, whether in your additional time ($), accountants ($), or third party services ($). Keep in mind, none of these things absolve you of liability if you mess this up. He is absolutely right.