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.
“To call Wayfair a ‘windfall’ is a double insult to state taxpayers,” said Steve DelBianco, president and CEO of NetChoice, a trade group that represents e-commerce businesses and online consumers. “First, every tax dollar comes from state taxpayer pockets, so there is no windfall of new money coming into the state.”
Second, DelBianco points to a GAO estimate that said new tax revenue from remote sellers would amount to less than 1 percent of total state and local tax revenue.
“So this windfall isn’t going to refill a state’s coffers,” DelBianco said.
Steve DelBianco joins Jim Blasingame to report on the negative press the large tech companies are receiving, and to try to reveal some of their counter balancing benefits.
Steve DelBianco joins Jim Blasingame to reveal that for every advantage and benefit we get from technological innovations, also likely comes a paradoxical element that is less attractive, like getting free stuff on the Internet.
Steve DelBianco joins Jim Blasingame to continue his reporting on how small businesses are being impacted by the Supreme Court ruling permitting every state and local government to require small businesses to remit sales tax for online sales.
On the other hand, small internet businesses will lose out because of the increased compliance costs, said Chris Cox, a lawyer for e-commerce industry group NetChoice.
Alongside retroactivity, e-retailers and trade association representing e-commerce, such as Washington-based NetChoice have openly decried Oct. 1 start dates for sales tax collections. Currently, nine states have announced an Oct. 1 implementation date for their South Dakota-esque online tax regimes.
The ecommerce association NetChoice wants sales tax compliance for businesses to be simpler. As a founding member of the coalition for True Simplification of Taxation (TruST), this hardly comes as a surprise. But its calls for simplification have grown louder since the Supreme Court of the United States ruled that states can require out-of-state businesses to collect and remit sales tax. Prior to the court’s ruling in South Dakota v. Wayfair, Inc., a state could impose a tax collection obligation only on businesses with a physical presence in the state.
On July 24, the House Judiciary Committee met to discuss the ramifications of the Wayfair decision. NetChoice was not among the witnesses. Nonetheless, the organization’s president Steve DelBianco submitted an 11-page statement to the hearing’s written record. It suggests Congress “use its constitutional authority to protect interstate commerce by restoring the physical presence rule.”
Should Congress allow the taxation of remote sales to persist, NetChoice asks Congress to allow states to impose sales tax on remote businesses — “but only if states adopt minimum simplifications stipulated by Congress.”