Editorials support Marketplace Fairness Act

April 30, 2013

The Marketplace Fairness Act has been all over the news in the last two weeks as it’s been debated on the Senate floor. The Senate is recessed for this week, but a vote on the bill is scheduled for Monday, May 6.

Most editorials on the topic have largely been in favor of online sales tax. Among the largest news outlets supporting it are:

(One notable exception to the general trend of support was the Wall Street Journal, whose April 17 editorial “The Internet sales tax rush” was effectively countered by the National Governors Association in a letter published on April 25.)

There have also been a lot of positive editorials from smaller local outlets, including:

If you’re interested in reading more, you’ll find a compilation of news articles on the Marketplace Fairness Act on marketplacefairness.org/news.

Congratulations to Senator-elect Heitkamp!

November 26, 2012

Heidi Heitkamp

Congratulations to Heidi Heitkamp, who was just elected senator of North Dakota! Some of our readers may recognize her name: She was the North Dakota Tax Commissioner when the state brought suit against Quill Corp. in an attempt to require the catalog company to collect use tax on purchases made by North Dakota residents. The case famously went to the Supreme Court, which ruled that it would be too difficult for businesses to collect sales tax for states where they had no physical presence. But, equally important, the court also said that “the underlying issue here is one that Congress may be better qualified to resolve, and one that it has the ultimate power to resolve.”

Four bills currently before Congress attempt to do just that and close the online sales tax loophole. We look forward to Senator-elect Heitkamp’s support on the issue!

Same everything, except tax treatment (2)

October 31, 2012


Sales tax shown is based on delivery to a Connecticut address. Connecticut sales tax rates are among the lowest in the nation.

Same everything, except tax treatment.

October 26, 2012

Guest TaxGirl post: “Why I support the Marketplace Fairness Act”

August 27, 2012

Every August Forbes contributor Kelly Phillips Erb, who writes the TaxGirl blog, asks her readers to send in guest posts to be published while she’s on vacation.

This year she provided three topics for guest posts, including “Is it fair to require online retailers to collect and remit state sales tax?”

Sten R. Wilson has contributed a post on that topic titled “Why I support the Marketplace Fairness Act.” In it, Wilson, owner of a sheep farm in upstate New York, explains that for him, collecting sales tax has been made much easier by states’ simplification of sales tax laws (through the Streamlined Sales and Use Tax Agreement) and by automated sales tax management services.

He supports the Marketplace Fairness Act because it provides incentive for states to simplify their sales tax laws:

The combination of today’s freely available technology and states’ simplification efforts is a great benefit for small businesses like mine. It eliminates bureaucracy, promotes efficiency, and increases productivity and profitability. It makes dealing with sales tax much, much easier for small business owners.

Passage of S.1832 the Marketplace Fairness Act will prompt all states to simplify their sales tax laws. Therefore, I support the Marketplace Fairness Act.

We sincerely agree! Wilson’s perspective as a small business owner is an important one in the online sales tax collection debate, and one that we haven’t seen enough in the media. The post is definitely worth a look.

TheStreet.com speaks out against online “sales-tax evasion”

December 8, 2011

TheStreet says when online retailers don't collect sales tax, it's tax evasion

An article on TheStreet calls the lack of online sales tax collection “sales-tax evasion” and says that it’s likely to come to an end soon.

The article uses strong language to compare online retailers that don’t collect sales tax to the “gray-goods stores” of the past:

There used to be a time when sales-tax evasion was a grimy business. It required a sleazy merchant and a greedy customer, conspiring to make the transaction in cash, “tax included” (wink-wink). Once there was a string of electronics stores on Manhattan’s Lower East Side that survived by non-taxed transactions in “gray goods,” in which the state tax authorities (and sometimes customers) were systematically cheated.

Today, of course, nothing has changed.

The merchants are still sleazy, the customers are still greedy — only now, sales-tax evasion is both commonplace and organized. The name for this particular variety of organized crime is known as “Internet retailing.”

As you might expect from that opening, the article doesn’t pull its punches. It makes for a read that’s compelling as well as informative. Witness this paragraph on online retailers’ losing battle against sales tax collection:

If the Internet retailers get socked with a sales tax, they have pretty much themselves to blame. They’ve been outmaneuvered by the brick-and-mortar stores, who have successfully presented this as a David vs. Goliath battle. But in a sense there’s also the historical fact that no business model predicated on cheating the government ever works. Amazon, by supporting the legislation, is simply going along with the march of history.

According to the article, legislation allowing states to require online retailers to collect sales tax is almost certain to pass. And we were thrilled to see this comment on the argument that collecting sales tax online is too complicated or burdensome:

Amazon’s acquiescence, meanwhile, made mush of [Overstock.com CEO Patrick] Byrne’s dubious claim that modern software wasn’t up to the task of doing something as complex as computing the correct sales tax for each customer.

As our regular readers know, we created TaxCloud expressly to make collecting sales tax easy and inexpensive for online retailers. It’s hard to see how anyone could argue that it’s too difficult to collect sales tax when a free service like TaxCloud is available to not only calculate the tax due in real time, but also to file sales tax returns, process exemptions, and handle any audits.

We recommend reading the entire article for an interesting take on the online sales tax collection situation.

The article ends by taking a moral stance on online sales tax with this closing paragraph:

I know, paying taxes is annoying. But even the Internet retailers, their laissez-faire anti-tax arguments notwithstanding, rely upon government services like the Postal Service to get goods to their customers. And if they use private services like FedEx, those package-delivery trucks travel on roads maintained by local taxes. For years, the net has taken advantage of those goodies without collecting a dime, and profiting from the resulting “discount.” It’s high time that free ride came to an end.

Governor Brown signs Amazon compromise bill into law

September 23, 2011
Governor Jerry Brown

Governor Jerry Brown

Breaking news: California Governor Jerry Brown has signed into law Assembly Bill 155, a bill that represents a compromise between Amazon.com and California lawmakers.

We’ve blogged about Amazon’s objection to California’s affiliate nexus law, which required online retailers with affiliates in the state to collect sales tax. Since the law was enacted in July, Amazon had been collecting signatures to put a referendum on the law on California’s next ballot. But earlier this month California lawmakers and Amazon reached a compromise that takes that referendum off the ballot and puts the affiliate nexus law on hold until September 2012.

The idea behind the postponement is that it gives time for Congress to pass the Main Street Fairness Act—and for California lawmakers and Amazon to work together to help get it passed.

We’re thrilled that Governor Brown has signed the compromise bill into law. With the affiliate nexus law on hold, we expect Amazon and other online retailers to resume its relationships with California affiliates, which means that 25,000 affiliates will no longer face the choice of losing their income or moving out of state.

And of course, as our regular readers know, we’ve always supported the Main Street Fairness Act as a much better option than state-by-state affiliate nexus laws. It doesn’t hurt affiliates, unlike the state laws, and it actually makes collecting sales tax easier for online retailers—it authorizes only states that have simplified their sales tax laws to require online retailers to collect sales tax.

And then, the main objection that online retailers have to the Main Street Fairness Act—that collecting sales tax for multiple states is too difficult—simply isn’t true, not any more. Technology has reached the point that collecting sales tax is no more difficult for online retailers than calculating shipping rates, something every online retailer does. (More information on myths and facts about the Main Street Fairness Act is available here.)

We applaud Governor Brown for signing AB 155 into law. It’s practical, bipartisan legislation that is supported by both Republicans and Democrats in the California legislature and ultimately serves the interests of both online retailers and California residents.