Washington, DC, July 23, 2012 — The Direct Marketing Association (DMA) today announced the creation of the True Simplification of Taxation (TruST) Coalition. The TruST Coalition will fight attempts to pass unfair Internet sales tax requirements in Congress. DMA is joined in creating TruST by the American Catalog Mailers Association (ACMA), Electronic Retailers Association (ERA), and NetChoice.
Since the Quill v. North Dakota decision was handed down by the Supreme Court nearly two decades ago, DMA has advocated that Congress require states to truly simplify their sales and use taxes and the consequent administration before conscripting every remote seller in the country to become a tax collector for every state with sales tax. In that spirit, the TruST Coalition advocates that Congress not overturn the physical nexus requirement established by Quill without first requiring by statute, the simplification of sales and use taxes within the States and the simplification of the administrative requirements for collection and auditing of those taxes.
“There are more than 9,600 taxing jurisdictions in the US today,” said Jerry Cerasale, DMA’s senior vice president of government affairs. “Requiring that any business — particularly a new one — be prepared to comply with the rules in all of those jurisdictions in order to do business across state lines is a precipitously high barrier and a very costly one. It would throttle new businesses before they even get off the ground.”
DMA believes that Congress would create an uneven playing field if it were to grant states the authority to conscript non-citizen remote sellers to become their unpaid tax collectors. The current sales tax regime, which was designed in the 1930s, is based upon the model of a consumer entering a retail establishment and purchasing an item. That retailer charges the sales tax applicable to the location of the store, with no concern as to where the customer resides. In 21st century e-commerce, a customer visits a website and purchases an item. To collect sales tax, the seller would have to know the tax rates for all 9,600 jurisdictions and be subject to audits from all of those jurisdictions — without the seller or the seller’s employees having a political voice in the vast majority of those jurisdictions.
“Applying a tax regime designed in the 1930s to 21st century e-commerce will not work,” said Cerasale. “It is time for states to simplify their sales tax regimes. This is not the time for e-commerce to be bogged down with unfunded tax-collecting burdens that will harm economic growth and job creation. The TruST Coalition seeks to fix the American tax regime without impeding economic growth.”