Imagine for a momentthat your company has relied on LIFO, or the last-in, first-out method of accounting, for the past quarter century.
Congress, in its infinite wisdom, decides to take that accounting tool away, force you onto FIFO and demands you repay your LIFO reserve.
Thankfully that nightmare scenario hasn’t happened, but what would you do if you learned Congress was considering it? Sit back and take it or fight back?
Studies show losses are worse than gains. The Loss Aversion theory suggests one who loses $100 of his hard-earned money will lose more satisfaction than the person that just found a $100 bill on the sidewalk will gain satisfaction.
The marketplace Fairness Act
Putting this back into law-making context, those who stand to lose a benefit or tax preference would be more motivated than those who would stand to gain from the change in law. Case in point: the Marketplace Fairness Act. Today, the unfair disparity that requires brick-and-mortar sellers such as members of ASA to collect and remit sales taxes on each sale puts them at a significant disadvantage to those that aren’t adding sales tax into their prices.
The opponents of MFA will do anything they can to protect this advantage — those opponents being the 1.2 million sellers on eBay. Not only are they motivated, but they also are mobilized. That is why stakeholders such as ASA and our allies at the Marketplace Fairness Coalition must do the same.
So you’re asked to match a price for a faucet that a customer found online for $100. Except at the end of the day, the price on that receipt would read anywhere from $104 - $108 because you cannot get around charging sales tax, thus the math never works in your favor.
Small businesses such as Wisconsin’s First Supply, Colorado’s George T. Sanders Company and Iowa’s Plumbing and Heating Wholesale have all joined the growing grassroots army of brick-and-mortar businesses that have said enough is enough. They have come to Washington, met with their legislators back home and have been featured in literature that the Marketplace Fairness Coalition is using to showcase the importance of finally passing this law.
The time is now to disprove the Loss Aversion theory and out-mobilize eBay’s army. If we fail to pass the MFA, you will continue to feel that loss. The decision-makers in Washington need to hear from you. Contact email@example.com and get involved today!
This article from ASA News was originally titled “Loss is the ultimate motivator” in the May 2015 print edition of Supply House Times.