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.”
The state sued Wayfair, Newegg, and others in July 2017 right after its South Dakota-style law went on the books, inviting a countersuit by the e-commerce industry. The American Catalog Mailers Association and NetChoice said the Quill physical presence standard blocked Wyoming from forcing out-of-state vendors to collect and remit sales and use taxes.
Steve DelBianco, president and CEO of NetChoice, told Bloomberg Tax Aug. 29 that its lawsuit in Tennessee is “still pending and we have scheduled discussions.” But regardless of the outcome, the Legislature has to act before collections can be required from remote sellers operating in that state, which won’t happen before January 2019, he said. The Tennessee Legislature is scheduled to reconvene Jan. 8, 2019.
American Catalog Mailers Association and NetChoice initially filed the lawsuit against the state in June 2017, and Wayfair Inc. and Overstock.com joined the suit in August 2017.
Specifically, in the settlement with the American Catalog Mailers Association and NetChoice, the state agreed to provide sales tax administration software for free and cover the costs of any errors caused by that software.
As you may recall, last month the ACMA held a conference call with Brann & Isaacson attorneys George Isaacson and Martin Eisenstein, ACMA President & Executive Director Hamilton Davison, and NetChoice Executive Director Steve DelBianco, the replay of which is still available by clicking here.