A Taxing Issue for State Legislators

This week, lawmakers from across the country convene in Los Angeles for the National Conference of State Legislatures, where they will hopefully attend to threats to America’s small businesses and consumers from an onslaught of new internet sales tax obligations.

Newly emboldened state tax collectors are aggressively imposing sales tax obligations on businesses with no physical presence within their borders. Online sellers must now absorb the costs of new systems and compliance—including liability for taxes on past purchases where no tax was due at the time of the sale.

Read More at Route Fifty

Route Fifty – A Taxing Issue for State Legislators

Route Fifty – A Taxing Issue for State Legislators (NetChoice Op-ed)

This week, lawmakers from across the country convene in Los Angeles for the National Conference of State Legislatures, where they will hopefully attend to threats to America’s small businesses and consumers from an onslaught of new internet sales tax obligations.

 

Bloomberg BNA – State of Wayfair: Tax Groups to Hold Huddle on High Court Ruling

Bloomberg BNA – State of Wayfair: Tax Groups to Hold Huddle on High Court Ruling

The states groups and those representing online sellers like NetChoice, Inc. are pushing to clarify the U.S. Supreme Court’s ruling in South Dakota v. Wayfair—which tossed out Quill Corp. v. North Dakota, the court’s 1992 physical presence threshold for when states could tax remote sales. States are expected to become even more active in taxing online sales after the ruling, and retail groups have been urging states and conformity-focused groups like the MTC to consider simplifying their schemes and approaching implementation cautiously.

The MTC will also be considering simplification measures suggested by Isaacson; 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 (ACMA) in Providence, R.I.

Brookville Times – US court backs states over web sales tax

Brookville Times – US court backs states over web sales tax

But NetChoice, a trade association for e-commerce firms, warned small businesses would have trouble complying with the different tax requirements in each state.

The group described the decision as a “body blow” to customers and small online businesses.

“Consumers will quickly feel the negative effects as those businesses dry up or are forced into the arms of Internet giants,” said Chris Cox, NetChoice outside counsel.

Multi Channel Merchant – Merchant, State Groups Look to Come to Terms in Wake of Wayfair Decision

Multi Channel Merchant – Merchant, State Groups Look to Come to Terms in Wake of Wayfair Decision

Representatives from the American Catalog Mailers Association (ACMA), NetChoice – representing ecommerce sellers – and the Multistate Tax Commission (MTC) met in Boston on July 25 at MTC’s annual meeting to begin a dialog about a way forward that ensures an equitable, fair and efficient process for out-of-state tax imposition and collection.

Bloomberg BNA – Oct. 1 Online Sales Tax Deadline Unrealistic: E-Commerce Rep

Bloomberg BNA – Oct. 1 Online Sales Tax Deadline Unrealistic: E-Commerce Rep

States enforcing new deadlines of July 1 and even Oct. 1 in the wake of a decision involving Wayfair, Inc. will “drive a groundswell of demand to go get a moratorium” from Congress, Steve DelBianco, president and CEO of NetChoice, a Washington-based trade association representing e-commerce businesses and online consumers, said July 26.

Isaacson, who represented Wayfair in the U.S. Supreme Court case, said he was speaking as counsel for the ACMA and Netchoice, among several groups that have been involved in much of states’ litigation against online sales tax regimes. He presented a list of 20 “suggested simplification measures” for states to take as they move forward.

Bloomberg BNA – Retail Advocates to Talk Digital Tax Future With Multistate Group

Bloomberg BNA – Retail Advocates to Talk Digital Tax Future With Multistate Group

Issacson, who also represented the Data & Marketing Association in earlier cases about state online sales tax schemes that ended up before the U.S. high court, said he will be joined by the presidents of the American Catalog Mailers Association and NetChoice at a session on the agenda of the MTC Executive Committee during its July 26 meeting in Boston.

NetChoice, an industry association for e-commerce, has been at the heart of many of the lawsuits designed to stop states’ online sales taxation efforts. And the group is pushing Congress to act to limit states’ authority, which it joined others in doing at a July 24 House Judiciary Committee hearing on the post- Wayfair landscape.

Bloomberg BNA – Wait, Wait: Congress Eyes State Digital Taxes, Wayfair Mulls Settlement (2)

Bloomberg BNA – Wait, Wait: Congress Eyes State Digital Taxes, Wayfair Mulls Settlement (2)

It’s unclear which of those will be on the table at the Judiciary Committee hearing, but “the committee is tuning-in to the growing chorus of state tax collectors demanding back taxes, interest, and penalties,” Steve DelBianco, president and CEO of NetChoice Inc., told Bloomberg Tax. “There’s enough noise here for Congress to step in and say, stop the music.”

DelBianco said in a statement late July 23 that “because of Wayfair, businesses have no clear test to determine whether they are obligated to pay a foreign state’s sales tax.

“The Commerce Clause is just as necessary now as when the constitution was written, and Congress must protect interstate commerce in the digital age,” DelBianco continued. “The time to act is now, and the longer Congress leaves the state tax playpen unsupervised, the worse the mess will be for American small businesses and consumers.”

He said the U.S. Supreme Court in Wayfair “misunderstood the true audit liability faced by America’s small businesses and there’s no guarantee that tax software services will be paid for by the states.”

NetChoice Testimony to the House Judiciary Committee on Examining the Wayfair Decision and its Ramifications for Consumers and Small Businesses

NetChoice to Congress: Protect Interstate Commerce

Without the physical presence rule, American businesses and consumers are put at risk by state-based internet taxes

Washington, D.C., July 23, 2018 – Tomorrow, the House Judiciary Committee will hold a hearing entitled “Examining the Wayfair decision and its Ramifications for Consumers and Small Businesses”. The hearing is the first step for Congress to prevent damage being done by last month’s Supreme Court decision in South Dakota v. Wayfair.

“Because of Wayfair, businesses have no clear test to determine whether they are obligated to pay a foreign state’s sales tax,” said Steve DelBianco, president of NetChoice. “Sellers are left with a dilemma to either collect tax that they may not owe at significant expense, or risk later being held responsible for uncollected taxes plus interest and penalties.”

“The Commerce Clause is just as necessary now as when the constitution was written, and Congress must protect interstate commerce in the digital age,” continued DelBianco. “The time to act is now, and the longer Congress leaves the state tax playpen unsupervised, the worse the mess will be for American small businesses and consumers.”

“The court misunderstood the true audit liability faced by America’s small businesses and there’s no guarantee that tax software services will be paid for by the states.”

NetChoice has supplied a written statement for the record available here.