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Accounting Today - The future of online sales tax: What if they fail to kill Quill?

Steve DelBianco, executive director at NetChoice, said there are three scenarios in a “keep Quill” landscape:

  • States will claim that Quill doesn’t apply to specific taxes, such as Ohio’s commercial activity tax and Washington’s gross receipts tax. In November 2016, the Ohio Supreme Court declined to extend Quill to the state’s business privilege tax. A petition requesting the high court’s review is expected in April.
  • States will continue to enact legislation that aren’t “kill Quill” laws, but are “creative extensions of nexus” to “withstand the physical presence” rule — such as affiliate, click-through and marketplace provider regimes. While those regimes recognize physical presence as the rule, they define physical presence as including a relationship with an in-state entity that has physical presence.
  • States will pursue “tattletale reporting tactics,” such as the Colorado and Louisiana laws that mandate non-collecting remote vendors to report consumers’ purchases to the state.

“Goodlatte’s bill confirms the physical presence standard with specificity, and then goes on to open the door to a multistate compact that allows home state enforcement on remote sales,” DelBianco said, adding that “the beauty of the congressional approach, of either Sensenbrenner or Goodlatte, is they in fact would stop the madness of all these state bills.”

DelBianco noted that Amazon’s business model has led to its expansion into more states to provide faster fulfillment. Likewise, competition over customer service and rapid shipping will encourage other retailers to expand their physical footprint, thus triggering collection obligations in more locations.

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Colorado should rethink its tattletale tax reporting law

There is a lot of talk in the state Legislature these days about taxes — from tax hikes on marijuana and new taxes for improved transportation to reduced taxes on business personal property and even eliminating taxes on some personal hygiene products.

However, lawmakers may want to add one more tax-related issue to this robust debate — a re-examination of rules that would make the Department of Revenue privy to the personal online shopping habits of Coloradans.

Six years ago, state lawmakers addressed the internet sales tax issue through legislation. It was a fatally flawed law, aimed at increasing collection of sales and use taxes for purchases made online or through catalogs. Lurking in that bill was a dangerous intrusion into the private lives of Colorado citizens.

Read More at the Colorado Statesman

Hoosier Internet sales tax bill is ill advised

The U.S. Constitution and Supreme Court precedent protect Indiana’s businesses from the scourge of Chicago and New York tax collectors.

Today, Indiana businesses, whether selling online, over the phone or via catalog, only must collect sales taxes for purchases to Indiana consumers. The businesses only must file taxes with the Indiana tax collectors and face audits from Indiana auditors.

As a result, Indiana’s main street businesses, such as Burton’s Maple Syrup in Medora, easily can use the Internet to reach customers across the country.

But it appears some lawmakers in Indianapolis are prepared to upend these protections and expose Indiana businesses to tax collectors from across the country.

Read more at Northwest Indiana Times 

Internet Retailer - The online sales tax may see new life in Congress

Steve DelBianco, executive director of NetChoice, a group that represents e-retailers and actively champions the Online Sales Tax Simplification Act option, says he expects Congress to resurrect prior legislation. “There is not yet movement towards a compromise bill, so I would expect reintroduction of each of the alternatives,” he says.

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POLITICO - Morning Tax: NOT A FAN

Eight out of 10 people in Colorado aren’t big fans of a law that forces retailers to tell the state government about purchases made from them, in order to ensure that use taxes on those purchases are made. Two-thirds of people in Colorado also say the law violates their privacy, according to the survey from Morar Consulting of 500 residents. (The survey was sponsored by NetChoice, which opposes the law.) The Supreme Court brushed aside the opportunity to consider the law late last year — and to re-examine the precedent that bars states from collecting sales taxes from businesses without a physical presence.

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BNA Bloomberg - Most Colorado Residents Oppose Reporting Law: NetChoice

“Colorado consumers are in for a rude privacy shock when this law goes into full effect,” Steve DelBianco, NetChoice Executive Director, said in a statement. “In many cases, linking a particular retailer to a specific customer will give the state information on that individual’s health concerns, political leanings, sexual orientation, personal tastes, and financial circumstances.”

By collecting and reporting shipping addresses, the state will learn when Colorado consumers have their purchases delivered to a different address than where they live, “potentially revealing personal and very private relationships,” DelBianco said.

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Op-ed: We now collect enough internet sales taxes to cut the tax rate

By Jonathan Johnson, Chairman of the Board of Overstock.com

Utah’s Gov. Gary Herbert and other internet tax proponents proclaim Utah’s uncollected e-commerce sales tax has reached $200 million a year. It’s a large number. And it’s largely wrong.

Supposedly, the shortfall results from out-of-state e-commerce retailers not collecting Utah sales taxes. But is $200 million the number right? It doesn’t seem to add up.

Here’s a back-of-the-envelope calculation of all 2016 e-commerce sales taxes due in Utah:

• The 2016 total U.S. retail e-commerce is $392 billion (estimates from Internet Retailer and eMarketer).

• Utah’s e-commerce visit share is 0.84 percent, based on the assumption e-commerce sales are proportionate to visits (Source: Hitwise and Connexity); coincidentally, that figure approximates Utah’s population proportion of about 0.9 percent.

• The average Utah sales tax rate is 6.53 percent (https://www.salestaxhandbook.com/utah).

• Therefore, Utah’s total e-commerce sales tax due — collected or not — would be $215 million: ($392 billion x .0084) x 0.0653 = $215 million.

If this calculation is correct, then either Utah is not collecting more than 90 percent of its e-commerce sales taxes, or the governor’s $200 million figure is wrong

READ MORE at Salt Lake Tribune

Steve DelBianco speaks with Small Business Radio

Part 1: We’re losing the battle for online taxes and consumer privacy

Part 2: The ongoing war for privacy and security in the cloud

Part 3: How much online freedom did you lose in 2016?

Wall Street Journal - High Court Sidesteps Fight on Online Sales Tax Rules

“States will now be unrestrained in passing new ‘tattletale reporting’ laws that force online and catalog retailers to report personal information and purchase data to state tax collectors,” said Steve DelBianco, executive director of NetChoice, a trade group representing internet commerce companies.

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