The Streamlined Sales and Use Tax Agreement is anything but streamlined, an eBay official testified yesterday at a congressional hearing examining the effect of bills designed to require out-of-state Internet vendors to collect state sales and use taxes.
Rep. Todd Akin, R-MO, chairman of the House Small Business subcommittee on workforce, empowerment and government programs, held the hearing. The bills, introduced Dec. 20, would mandate provisions of the Streamlined Sales and Use Tax Agreement.
S. 2152, from Sen. Michael Enzi, R-WY, and S. 2153, from Sen. Byron Dorgan, D-ND, would permit states that become voluntary members of the SSUTA to require remote sellers to collect and remit sales and use tax. The bills were referred to the Senate Finance Committee. The agreement lets remote sellers selling to people or businesses in member states voluntarily collect taxes on sales that occur via the Internet, telephone or catalog. So far, 19 states have passed legislation needed to join.
Enzi and Dorgan are longtime supporters of mandatory sales tax collection. Enzi's bill is identical to a 2003 bill and includes a provision releasing companies with sales under $5 million a year from collecting the tax. Dorgan's bill asks the Small Business Administration to initiate a rulemaking as to the dollar amount for the exemption.
The SSUTA “is a very complex system, and small businesses using the Internet could never comply without the paid help of technology service providers,” Brian Bieron, senior director of federal government relations at eBay, said in written testimony. “The states claim that they will pay those providers, but the amount promised is likely to prove woefully insufficient and would put small businesses at the mercy of a very unreliable system.”
However, Paul Misener, vice president, global public policy at Amazon.com, said large online companies and electronic payment systems already provide myriad transactional services to small businesses.
“If the states' sales tax codes are truly simplified and collection requirements are uniformly applied, Internet sales tax will not cause headaches for small businesses online, and actually will cure the preexisting disadvantages to small businesses offline,” he said in his testimony.
Other witnesses included Walter Hellerstein, a University of Georgia law professor; Ernest Perry, owner of a small business called Treasures Recycled in Charlotte, NC; and Rory Rawlings, founder and chief tax automation officer at Avalara, Bainbridge Island, WA, one of the certified vendors providing software in the program.
Melissa Campanelli covers postal news, CRM and database marketing for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters