Bill Would Impose Significant Burdens on Small Businesses
New York, NY, April 23, 2013 — The Direct Marketing Association (DMA) has written a letter to the full Senate, urging them to vote against final passage of the Marketplace Fairness Act (S. 743) as currently drafted. This bill has moved to the Senate floor without any deliberation at the Committee level – and without a chance for marketers to say how this will affect their business, customers, and employees.
S. 743 was introduced less than one week ago and has not received a full vetting and markup in a Senate committee. In fact, the issue of whether to impose tax collection obligations on remote sellers has never been fully considered in a Senate committee, even as states have tried and failed to create a workable collection system for over a decade.
DMA holds that the Senate should carefully examine the dire consequences that S. 743 will impose on the American economy without the type of meaningful and mandatory simplifications that DMA continues to advocate for.
DMA urges marketers to contact their Senators, asking them to oppose the bill in its current form and to give full consideration through the normal process. Marketers should visit the “take DMAAction” section of www.DMAAction.org to contact their Senators directly.
DMA continues to work with the True Simplification of Taxation Coalition (TruST) to educate Senators on the need for mandatory simplifications that the states must complete in order to require remote sellers to collect sales taxes in states where they have no physical presence.
The full text of DMA’s letter to the Senate follows below.
April 23, 2013
Washington, D.C. 20510
I am writing to you on behalf of the Direct Marketing Association to ask that you vote against final passage of the Marketplace Fairness Act (S. 743) as currently drafted.
S. 743 was introduced less than one week ago and has not received a full vetting and markup in a Senate committee. In fact, the issue of whether to impose tax collection obligations on remote sellers has never been fully considered in a Senate committee, even as states have tried and failed to create a workable collection system for over a decade. Having had twenty years since the US Supreme Court handed down its decision in Quill vs. North Dakota, it seems unnecessary to rush consideration of this important economic issue without first proceeding through regular order and giving all stakeholders the opportunity to express their concerns.
The bill makes complex changes to the economy while leaving many important questions unanswered – putting both businesses and consumers in harm’s way by imposing new burdens that will hinder economic growth and job creation.
The Senate should hold states accountable before granting them expansive new tax powers and we respectfully request that you vote against any Internet Sales Tax proposal that does not include reasonable simplification requirements. At a minimum, such simplification requirements should include:
- Provide Certified Software: States must provide consolidated software for rate lookup, collection, electronic filing, and funds transfer. Users of the software would be immune from state and civil liability for errors in taxes collected.
- Establish Universal Sales Tax Rate: Enact a single sales tax rate per state for remote sales.
- Reimburse Businesses for Reasonable Costs: States should compensate businesses for reasonable costs of collecting sales taxes, including purchase and implementation of software.
- Universal Definitions for Taxable/Exempt Products: A single set of definitions for taxable and exempt products for all states.
- One, Single Audit for All States: A single audit on behalf of all states and local jurisdictions conducted by a single state where the seller has physical nexus, or a designated state in cases where a seller lacks physical nexus in any sales tax state.
- Common Sales Tax Return: There should be a common sales tax return for remote sellers to file electronically.
- National Sourcing Sales Rule: A single national rule for sourcing sales.
- Align Sales Tax Holidays: Harmonize sales tax holidays and thresholds, or give remote sellers an optional exemption from participation in sales tax holidays and thresholds.
- Allow Remote Seller Disputes: Allow remote sellers to challenge states in federal district court for disputes on sales tax collection, including whether a state is following congressionally required simplifications.
- Preempt/Preclude Sales Tax Obligations: Preempt and preclude state laws imposing sales tax obligations on businesses with no physical presence in that state.
- Small Business Exception: A congressionally-determined exception for small businesses.
Without the meaningful simplifications outlined above, S. 743 will expose American businesses – just beginning to recover from weak economic conditions – to a massive and untested expansion of state taxing powers.
The protection of interstate commerce is a fundamental responsibility of Congress. Allowing state interference in interstate commerce should not be done lightly or without full deliberation of the consequences.
We respectfully ask that you vote against final passage of the Marketplace Fairness Act (S. 743) – or any other proposed Internet Sales Tax proposal that does not include these reasonable simplification requirements.
Senior Vice President, Government Affairs Direct Marketing Association
About Direct Marketing Association (DMA)
The Direct Marketing Association (www.the-dma.org) is the world’s largest trade association dedicated to advancing and protecting responsible data-driven marketing. Founded in 1917, DMA represents thousands of companies and nonprofit organizations that use and support data-driven marketing practices and techniques.
In 2012, marketers — commercial and nonprofit — spent $168.5 billion on direct marketing, which accounts for 52.7 percent of all ad expenditures in the United States. Measured against total US sales, these advertising expenditures generated approximately $2.05 trillion in incremental sales. In 2012, direct marketing accounted for 8.7 percent of total US gross domestic product and produces1.3 million direct marketing employees in the US. Their collective sales efforts directly support 7.9 million other jobs, accounting for a total of 9.2 million US jobs.
DMA’s most current initiative is the Data Driven Marketing Institute (DDMI), which advances and protects data-driven marketing by engaging the entire industry in a coordinated campaign to set the record straight about the countless ways that data-driven marketing benefits consumers and fuels the data-driven economy.
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