The Direct Marketing Association has voiced its opposition to a bill introduced this week in Congress that seeks to give states the ability to compel online sellers to collect sales taxes for all state and local taxing jurisdictions. The “Sales Tax Fairness and Simplification Act” (S.2152), introduced by Sen. Mike Enzi (R-WY) proposes to help states collect tax revenue that is being lost because remote sellers do not have to remit sales and use taxes on catalog and Internet purchases.
According to Enzi, this bill would streamline the country’s more than 7,500 sales and use tax jurisdictions by permitting states that become voluntary members of the Streamlined Sales and Use Tax Agreement (SSTA) to require remote sellers to collect and remit those taxes.
The SSTA is an agreement among 44 states, the District of Columbia and local governments and businesses that attempts to develop methods to simplify sales and use tax collection by retailers and states.
Enzi noted that 19 states have already enacted legislation to change their tax laws to comply with the SSTA. These changes, he argued, would “bring uniformity to definitions of items in the sales tax base, reduce the paperwork burden on retailers, and incorporate new technology to modernize administrative procedures.”
The DMA objected to the lack of a single national standard for taxation and cited U.S. Supreme Court decisions ruling that states are not required to collect taxes from companies that lack a physical presence within their borders. “True sales tax simplification would require states to adopt standardized definitions and offer a single tax rate per state for all types and channels of commerce,” said DMA president John A. Greco in a statement. Jerry Cerasale, DMA senior vice president, government affairs noted that, “the Supreme Court told states in 1967 and again in 1992 that if they want the power to tax sales originating outside their boundaries, then they have to remove the burden placed on retailers by the complexities of having to comply with the requirements of thousands of different taxing jurisdictions.” S. 2152 has been referred to the Senate Finance Committee.
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