Soon in the U.S., enterprises will have to report every business transaction over $600 to the government. I'll have to tell the government when IT Investment Research buys a new computer from Best Buy (BBY) and Best Buy has to tell the U.S. Internal Revenue Service (IRS) that I bought one. And maybe even Mastercard (MA) has to tell the IRS it "financed" the deal. (If I buy that new TV I'm thinking of, I can't call that a business expense but do the other two parties still have to comply?)
And that's not to mention the effect on eBay.
And is that before or after the Massachusetts sales tax?
That will make "Under $600" the new mantra for enterprise software and information technology distributors and retailers. That demand will filter out to the manufacturers and they will need to lower their prices at the beginning of the supply chain for all kinds of business equipment. That new U.S. government mandate will drive down overall information technology (IT) and enterprise software market revenue in the short term but it may expand the IT market in the long term as lower prices help meet the pent up demand.
Will larger enterprises have to report each monthly subscription maintenance fee paid to IBM, Oracle (ORCL) and SAP or can they just report the yearly total? And vice versa for the leading enterprise software providers. Do HP and Xerox (XRX) have to break out each business printer companies buy or simply total them up when they send in their tax returns. As much as this mandate is going to test marketeers, it's got to be a goldmine for tax lawyers.
Luckily my small business doesn't have to spend that much for its accounting and tax software. Or for this blogging engine. But maybe that's going to change now that SixApart has been acquired.
-- Dennis Byron
(no financial interest in companies mentioned)
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