DMA Takes Issue With Marketplace Fairness Act

Says it would compel online retailers to become unpaid tax collectors; brick and morar retailers say bill is needed to level playing field

By John Eggerton -- Broadcasting & Cable, 3/19/2013 11:14:38 AM

The Direct Marketing Association says a proposed Senate amendment to the 2014 Federal Budget would "conscript American businesses with no presence in a state and force them to become the unpaid tax collectors for that state."

The DMA is opposed to the Marketplace Fairness Act, which imposes an Internet sales tax collection obligation on businesses DMA says should not be part of the Federal Budget.

The Act would allow states that had simplified their own sales tax laws to require online retailers to collect sales tax at the time of a the transaction.

"The Senate should not take this dubious road without full consideration," said Jerry Cerasale, DMA's senior VP of government affairs, in a statement.  "State sales taxes are a morass of complicated definitions, rates, thresholds, tax holidays, filing procedures, registration procedures, etc.  Endorsing throwing ecommerce into that briar patch without full consideration is wrong and should be avoided."

By contraast, the National Retail Federation (NRF) is all for Congress considering, and passing, the Marketplace Fairness Act as part of the budget bill.

"As the retail industry evolves and digital commerce becomes a more prominent portion of total retail sales, it is critical that the tax laws not discriminate between similar businesses based on how their products are distributed," said the NRF. This collection disparity has tilted the competitive landscape against local stores creating a crisis for brick-and-mortar retailers around the country and in your state. The Marketplace Fairness Act addresses the crisis by removing the constitutional limitation on states' authority to collect sales and use taxes from remote sellers. This legislation will level the playing field, while protecting small businesses from complicated laws in other states with a healthy small business exemption."