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Cheat Sheet Q & A:
Internet Sales Tax:
I have been thinking about the story you did this morning about charging sales tax on internet sales. I have some thoughts and questions regarding this topic. I vacillate back and forth on whether or not this is a good thing (market leveler) or not a good thing (additional way for government to obtain funding to expand spending). At the end of the day, I don’t think we need additional government spending.
Bottom Line: Most likely no. Like tradiontional sales tax in which can be collected at the local level in addition to the state level it would be possible for local sales taxes to be collected on internet purchases (this currently happens with existing internet sales tax for companies that collect based on having a physical location within a state)
Bottom Line: While it’s true that the software and compliance requirements can be costly and burdensome, under the expansion the states would be required to provide the software to the companies free of charge that would automatically calculate and collect the sales tax.
Bottom Line: The average ticket size of a transaction online is currently $59.50. Most large online retailers offer free shipping on most items over a certain limit. In Amazon.com’s case (the largest online retailer) the level is $25 for most items at $50 or more many major retailers offer free shipping. Because of the lack of overhead of a physical location, many online retailers are able to offer the shipping for free at certain low levels and thus from the point of view of shipping leveling the playing field – it doesn’t quite equate to doing so for the average online customer.
Potentially yes but need more clarity from the law
Bottom Line: Interesting question. Theoretically yes. The
What if these small internet businesses split off to keep revenues under $1 million each?
Bottom Line: More terrific questions & excellent points. The Federal Government's definition of small business is currently defined through the SBA as a company with revenue as high as $17 million dollars per year. Clearly 17 times the proposal of $1 million in annual revenue. It’s arguable that the cutoff should be at least at the SBA defined level if one of the goals is to aid small business development.
Economics 1.7 and 2nd quarter
Bottom Line: Last Friday’s
Economists are projecting 1%
The news generally isn’t positive though as a growth rate lower than 2% isn’t enough to make significant progress in the job market. Which leads us to the next story…
What's actually happening with corporate revenue and it's implications for the job market:
Bottom Line: The stock market performance continues to mask about half of the overall story. Based on April’s market performance you’d be inclined to think that companies are generally growing (perhaps significantly). Well a peak just below the stock performance into the quarterly earnings reports of publically traded companies reveals declining net revenue. That’s right net declines in top line performance. Overall for companies that have reported, revenue is down about 1.5% for the most recent quarter.
Declines in top line performance is not only a bit of a warning regarding the shaky ground the economy is on but also indicates that companies will not be in a position to add people to their payroll. It appears likely that the second quarter will bring little or no progress with regard to job creation.
Apple WWDC sells out in 3 minutes but iPhone not expected:
Bottom Line: So the headlines regarding Apple have resulted in a near 180 from this time last year when Apple could seemingly do no wrong. Ahh how ADD technology can be. Make no mistake though… There still is no consumer tech company with more influence than Apple.
Apple’s annual developer conference is coming up June 10th. The ticket is still as hot as ever. Apple sold out the event in less than 3 minutes. So what can we expect from Apple in about a month? A really cool new iPhone?, Apple TV? How about that watch? Well… we just may be a bit disappointed.
Consensus is that the focus of the WWDC will be a new operating system and new Macs. Hopefully Apple has a trick or two up their sleeve but don’t count on it…
Housing market keeps on trucking:
Bottom Line: Good news continues to be good news in the housing market. The latest temperature check in the housing market shows a continued recovery.
The most recent pending home sales data shows that pending sales grew by another 1.5% last month, to a level not reached since the first half of 2010. What’s significant about that timeline is what was driving the pending activity early in 2010 – the 1st time homebuyer tax credit.
While the Fed continues to incentivize housing through QE and low interest rates, we don’t have the added fuel of tax credits so this is more organic growth than not. If you had been fearful of a near-term downturn in housing, it looks likely that the housing recovery is poised to continue for now.
Return of the Twinkie:
Bottom Line: If you’ve been craving a Twinkie and were wondering if the time would ever come again in which you’d be able to indulge… You only have a couple more months to wait.
The company that bought the rights to Twinkies and Ho Ho’s from Hostess has announced a series of plant openings that will soon be produce the two afore mentioned sweets. The current estimate for the return of the Twinkie and Ho Ho is late July.