States that have voluntarily coordinated their sales tax regimes for remote sellers are showing little interest in federal legislation to mandate such harmonization, said Steve DelBianco, president and CEO of NetChoice, an e-commerce trade association.
“I floated the idea to a crowd that you would have thought would be attracted to the idea,” DelBianco said, “but there was little interest in any federal legislation in the wake of Wayfair.”
A federal bill imposing standards of uniformity and simplicity on the states is needed to ensure that remote sellers can cope with their new collection obligations and that the states don’t ignore the limits on state authority set up by the court, said Steve DelBianco, president and CEO of NetChoice, an e-commerce lobbying group.
The discussion took place Oct. 4 in St. Louis at an informal gathering of tax stakeholders organized by the National Conference of State Legislatures. Also at the meeting were officials from the Streamlined Sales Tax Governing Board Inc. (SSTGB), the Multistate Tax Commission, the National Governor’s Association, and the Federal Tax Administrators.
NetChoice has proposed 20 tax simplifications, a ban on retroactive taxes, a delay before collection obligations can be imposed, a small-business exemption, and incentives to get states to join the Streamlined Sales and Use Tax Agreement (SSUTA).
While there was an initial meeting in July between the ACMA, the MTC and NetChoice – an online seller advocacy group – to try and find common ground in the wake of Wayfair and set up working groups, a subsequent meeting never materialized.
“This won’t be much of a milestone for states, who will add less than 1 percent to their total tax revenue,” said Steve DelBianco, CEO of retail trade group Netchoice. “But these new tax collection burdens will be a millstone around the necks of small businesses who go online to reach customers around the country.”
George Isaacson of Brann & Isaacson, Steve DelBianco of NetChoice, and Hamilton Davison of the American Catalog Mailers Association laid the groundwork for such discussions in July when they met with the Multistate Tax Commission’s executive committee in Boston.
Many states adopted tax-collection rules that would take effect next month, or later. But the DOR is sticking to its story: We started taxing you last fall. NetChoice, a trade group for online retailers, calls this retroactive taxation, and complains that companies are being unfairly hit up for the nearly nine months before the landmark ruling. DOR says it’s just doing its job.
During the July meeting, post-Wayfairsimplification measures were passed along to state groups by George Isaacson, a senior partner at Brann & Isaacson LLP in Lewiston, Maine, who represented e-retailers before the high court in Wayfair; Steve DelBianco, president and CEO of NetChoice, a Washington-based trade association representing e-commerce businesses and online consumers; and Hamilton Davison, president and executive director of the American Catalog Mailers Association in Providence, R.I.
Steve DelBianco, president and CEO of NetChoice, an e-commerce trade organization, defended Sensenbrenner’s bill, arguing that in the event the bill became law, any sales tax retained by a state before Jan. 1, 2019, could be retained to satisfy use taxes owed.
Use tax is a sales tax on purchases made outside one’s state of residence for taxable items that will be used, stored, or consumed in one’s state of residence and on which no tax was collected in the state of purchase, according to investopedia.
“Use taxes are the flip side of the coin, it’s the same tax, if you don’t owe sales tax you still owe use tax,” DelBianco told Bloomberg Tax. “The real intention of Sensenbrenner’s bill is to relieve businesses of far-too-soon state implementation dates. It’s a small thing to ask for states to wait until January.”
Washington, D.C., September 14 – This afternoon, Reps. Reps. Sensenbrenner, Eshoo, Duncan, and Lofgren introduced the Online Sales Simplicity and Small Business Relief Act of 2018. This legislation is a response to the chaos caused by the June-2018 Supreme Court decision in South Dakota v. Wayfair.
The Court overturned decades of legal precedent and put small business owners at the mercy of all out-of-state sales tax collectors, covering more than 12,000 local tax jurisdictions.
Below, please find a statement from Steve DelBianco of NetChoice regarding the introduction of HR 6824 this afternoon:
“The U.S. Congress has the Constitutional role of protecting interstate commerce. Reps. Sensenbrenner, Eshoo, Duncan, and Lofgren are to be commended for stepping into the breach created when the U.S. Supreme Court erased 60 years of settled law that restrained state tax collectors from reaching across their borders.
America’s small businesses cannot survive under the complex burdens and audit risks from 46 different state sales tax regimes. HR 6824 incentivizes all states to significantly simplify their sales tax systems.”