The Direct Marketing Association today declared its opposition to a proposed amendment to the 2014 Federal Budget endorsing the Marketplace Fairness Act. If passed, the Senate bill would require remote sellers to collect and remit sales taxes to states where consumers purchased their products via the Internet or catalogs.
Two previous efforts to enforce remote tax collection, in 1967 and 1992, were both shot down by the United States Supreme Court.
Though the bill promotes the Streamlined Sales and Use Tax Agreement, a plan 44 states have signed on to, DMA‘s position is that it does not sufficiently answer deficiencies noted in the Supreme Court decisions. The association’s position is that e-commerce businesses and catalog sellers will become unpaid tax collectors for the states.
“Any law endorsed by Congress should require states to simplify the process, but that is not the case here,” says the DMA’s SVP of government affairs Jerry Cerasale. “This act actually expands it.”
If passed, DMA asserts, the law would require 46 states to conduct their own audits of remote taxes, their own returns and filing schedules, and their own lists of taxable goods. More troubling, according to the association, is that the law contains no preemption of state attempts to apply their own tax laws beyond their borders.
“The Senate should not take this dubious road without full consideration,” Cerasale says. “State sales taxes are a morass of complicated definitions, rates, and procedures. Endorsing throwing e-commerce into that briar patch is wrong.”
UPDATED March 20: The American Catalog Mailers Association adds its “vigorous” opposition to the amendment, noting that it would “put a lot of remote catalog mailers in dire straits.” President & Executive Director Hamilton Davison remarks: “Before they could possibly collect sales taxes from customers outside their taxing jurisdictions — nearly 10,000 different authorities in all — remote catalog sellers need true simplifications.”