Goodlatte Principles Create Common Ground for MFA Combatants

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Rep. Bob Goodlatte
Rep. Bob Goodlatte

The House Judiciary committee today issued seven “Basic Principles on Remote Sales Tax” as it prepares to craft its answer to the Marketplace Fairness Act (MFA) that passed the Senate earlier this year. A Judiciary Committee aide told Direct Marketing News that one of the purposes of the list was “to encourage feedback from businesses, retailers, consumers and other interested groups.”

For now, at least, it appears to have done the trick, winning resounding approval from both brick-and-mortar retailers who applauded the passage of MFA and remote sellers who didn't.

“Americans across the country are affected by the issue of Internet sales tax whether they are consumers or business owners,” said Committee Chairman Bob Goodlatte (R-VA) in a statement introducing the list. “I greatly look forward to hearing fresh approaches to this issue and continuing the discussion.”

Goodlatte's list had American Catalog Mailers' Association President Hamilton Davison sounding downright upbeat on the topic of MFA. “It's a good and thoughtful list that recognizes the plan passed by the Senate does not level the playing field for all retailers. [Goodlatte] is looking to gain some basic agreement.”

The National Retail Federation, one of the biggest lobbyists for legislation that would force online retailers and catalogers to collect state sales taxes from all customers, saw promise in the bill, too. “The National Retail Federation welcomes the release of these principles,” said the group's SVP of government relations David French in a statement released today. “[They] will serve as a legislative roadmap for advancing sales tax fairness legislation in the House of Representatives.”

The principles hold that no new precedents for interstate taxation be created, that the tax burden not be greater on remote sellers than on traditional retailers, that compliance should be simple and not overloaded with requirements, and that all sellers should have direct recourse to protest rates and charges deemed unfair.

“I'm thrilled the legislation is not being railroaded through the House as it was through the Senate,” said online merchant Louis Giesler, president of AmeriMark Direct, which sells products via Web and mail order. “I'm not against paying taxes, but I don't want to get audited by any state other than Ohio or New Jersey, where I have offices..You have to simplify state rates and tax holidays. It's impossible to compute all the inconsistencies.”

The House Judiciary Committee should soon announce hearings to discuss the proposed legislation—hearings that promise to be more constructive than hearings on MFA have been in the recent past.

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