TO CLARIFY: Morning Tax reported on Monday that one key opponent of federal online sales tax legislation believed that the National Conference of State Legislatures’ estimate that $26 billion worth of sales tax from remote sales weren’t collected was over the top, with a more feasible finding being at most $11.6 billion. But Steve DelBianco of NetChoice, who came up with that projection, believes a more likely figure is $5.2 billion. So in short: Supporters and opponents of allowing states more latitude to force out-of-state vendors to collect sales tax continue to have wildly different projections about how big the problem is.
Also of interest: The Colorado Senate Finance Committee holds a hearing today over a measure to repeal a law that forces out-of-state companies to inform the customers about sales taxes owed, a law that wound its way to the Supreme Court.
The administration’s unique legal theory is “too clever by half,” Steve DelBianco, the executive director of the trade group NetChoice, said in an email Tuesday.
“The Supreme Court said that out-of-state sellers who mailed ‘an avalanche’ of catalogs into North Dakota could not be forced to pay the state’s sales tax,” he said of the 1992 decision. “So how in the world can Massachusetts deny that this ruling applies to e-retailers, who merely post a website that may be requested by Massachusetts consumers?”
DelBianco expressed hope that “state lawmakers will realize this DOR directive is headed in the wrong direction, by inviting lawsuits while bringing in no new tax revenue.” The administration has projected the tax will bring in $30 million a year in additional revenue.
The reference to litigation is likely no idle threat on the part of NetChoice. The organization has brought lawsuits in South Dakota and Tennessee against similar taxes implemented by those states in recent years. South Dakota was forced to file lawsuits against three major retailers, including Boston-based Wayfair, after they did not register with the state to collect sales taxes.
Asked if NetChoice was prepared to sue Massachusetts, DelBianco indicated that if that group did not, someone else could. “Too soon to say whether we would be the ones to sue Massachusetts,” he said. “We have lawsuits in progress already in South Dakota and Tennessee, and there are plenty of potential plaintiffs to go around.”
NetChoice and the ACMA’s lawsuit against Tennessee’s rule asserts that it is “plainly unconstitutional” as it “violates the Quill physical presence requirement, usurps the role of Congress in regulating interstate commerce, and unlawfully expands the State’s taxing authority over companies, individuals, and organizations located throughout the United States, and potentially the world, based solely on their having customers in Tennessee.” The groups ask the court to bar enforcement of the rule.
Steve DelBianco, executive director of NetChoice, told Bloomberg BNA April 4 that the groups had to pursue an administrative challenge before filing the lawsuit.
DelBianco told Bloomberg BNA that “[f]urther economic nexus challenges are simply unnecessary now that this is headed to the highest court of the land, wasting taxpayer dollars while eroding respect for the legal system and, in fact, our entire system of government.”
But opponents of online sales tax legislation have long said that those sorts of estimates far overstate the amount of sales taxes left on the table — and this time is no different, said Steve DelBianco of NetChoice. DelBianco came up with a far skinnier figure — at most $11.6 billion in uncollected sales, extrapolating from 2015 data that suggests around $23.2 billion in total sales taxes were due on online purchases, and one could conservatively assume that around half of that was collected.
The Executive Director of US lobbying group NetChoice, which counts StubHub owner eBay as a member, Steve DelBianco wrote in a recent article for the Washington Post that: “Virginians deserve to have safe and easy ways to buy, sell and give away their sports and concert tickets. Yet, Ticketmaster is focused on requiring fans to purchase ‘credit card entry’ tickets which require fans to present the credit card used to buy the ticket plus a government-issued identification card for the person who bought the ticket”.
Steve DelBianco, executive director of NetChoice, observed that when Colorado passed its transaction reporting measure, legislators believed that online retailers would surely collect the tax rather than turn over their sensitive customer data to the state.
[O]ne retail stakeholder, Steve DelBianco, the executive director of NetChoice in Washington, D.C., cheered that the same outcome will likely occur in the high court. Assuming further appeal to the U.S. Supreme Court, he noted, “if [it] declines to hear the case, then Quill stays in place.” NetChoice, along with another concerned retailer, the American Catalog Mailers Association, also sued South Dakota last April, asking the court to declare that S.B. 106 is facially unconstitutional.
Steve DelBianco, the above-mentioned NetChoice executive, does not like the “tattle-tale provision” of Colorado’s law and is helping lawmakers there draft a bill that would kill it, according to a different Bloomberg piece. The proposal is expected shortly.
The Executive Director of US lobbying group NetChoice, which counts StubHub owner eBay as a member, Steve DelBianco wrote in a recent article for the Washington Post that: “Virginians deserve to have safe and easy ways to buy, sell and give away their sports and concert tickets.