Mandatory sales tax proposal raises debate in the industry

While the Direct Marketing Association and the Electronic Retailing Association spoke out last week in opposition of the Sales Tax Fairness and Simplification Act (H.R. 3396.), the National Retail Federation supports it.  

The bill, which was introduced  on August 3 by Rep. William Delahunt (D-MA) would make interstate sales tax collection mandatory, regardless of whether the seller has a physical presence in the taxing state.

“This is one of a number of hearings that have been held on this issue over the past 20 years and it was an opportunity for the DMA to express its position that we do not support an Internet sales tax,” said Mark Micali, VP of government affairs at the DMA.

Both the DMA and ERA contended that the proposed tax could potentially hurt e-
commerce companies, especially small to midsize businesses.

However, J.C. Penney Corp. Inc. VP Wayne Zakrzewski, who testified to House Judiciary Subcommittee on behalf of the NRF said, “Passage of H.R. 3396 into law would be the appropriate next step to a modern, fair and responsive sales tax system.”