DMA Urges Simplest Taxation of Remote Sales
H. Robert Wientzen, the DMA's president/CEO, said that though the association's long-standing position has been "no nexus, no taxes ... sooner or later, it's politically likely that we will have to deal with this issue differently. We will probably end up having to collect and remit sales taxes on all remote sales."
Wientzen was addressing the 2001 Government Affairs Conference of the Direct Marketing Association and the Internet Alliance here.
"Of course, we'd prefer no remote sales tax collection," he said, "but wrangling taxes for 50 states is a lot more appealing - and, frankly, a lot more practical and affordable - than doing so for 7,600 towns, municipalities and even mosquito districts nationwide."
Three major Senate bills deal with remote sales taxation.
Sen. Byron Dorgan, D-ND, sponsors one bill, S. 512, and Sen. Ron Wyden, D-OR, sponsors another, S. 288. Both would extend the moratorium on the taxing of Internet access, which ends Oct. 21. But "Wyden's bill would open the door to genuine simplification and create uniformity of the 7,600 tax codes," Wientzen said, "and Dorgan's would not."
A third bill, recently introduced by Sen. George Allen, R-VA, chairman of the Senate Republican High-Tech Task Force, would institute a permanent moratorium on taxation of Internet access.
Wientzen said the DMA would continue to work with the senators to try to devise a bill that would benefit direct marketers.
"However, regardless of whose name is on any final remote sales tax bill -- if there is one -- the DMA's support would be contingent on several key elements," he said, "including one unified sales tax rate per state; a clearly articulated standard for business activity tax nexus; one uniform audit form recognized by all states; adequate compensation for the costs of collecting and remitting sales tax; and full and affirmative congressional review and approval of the states' simplification plan prior to implementation."
However, action on Wyden's and Dorgan's bills was postponed to give them more time to blend their bills into one. Sen. John McCain, R-AZ, chairman of the Commerce, Science and Transportation Committee, said he urged Dorgan and Wyden to reach an agreement as soon as possible so the panel could consider the bill by no later than mid-June.
Meanwhile, the Senate Finance Committee is considering the New Economy Tax Fairness Act, S. 664, which would prohibit states from taxing sales over the Internet, by telephone or other direct response methods unless the seller has a physical presence in the taxing state.
Remote sales taxation appeared to be an important topic for attendees to the conference. Laurence Midler, senior vice president and general counsel at Micro Warehouse, a business-to-business computer direct marketer in Norwalk, CT, said, "The issue of remote sales taxation is probably the most important issue on my radar screen right now ... and the one issue that I deal with practically every day."