The Marketplace Fairness Act of 2013 was introduced for a vote straight to the senate floor by Senate Majority Leader Harry Reid, thus bypassing committee debate. According to the Wall Street Journal April 21st Article, The Internet Sales Tax Rush, “The text of this legislation, which would fundamentally change interstate commerce, only became available on the Library of Congress website over the weekend.”
I'm very opposed to it, and I ask you to look into it and express your opposition as well. I’ve worked in sales and use tax consulting since 2005. I watched and handled issues for multiple states and local jurisdictions. The laws are just not simple! The compliance burden is tremendous and is not affordable for many small, mid-sized and even large companies.
The website www.marketplacefairness.org promotes the bill saying “Collecting sales tax for sales in multiple states was too difficult before the internet, not anymore. Technology has eliminated historic costs and burdens.”
This is simply not true! I wrote to Senator Reid asking that he withdraw his support. I offered this challenge:
I would challenge any Senator or Representative who believes the laws are simple enough and technology is the magic pill to answer questions I'd pose about sales and use tax in their own state let alone across multiple states and local jurisdictions.
The technology(compliance software) can cost $30,000 or more. It doesn’t account for the companies’ sales and use tax personnel or consultant's services needed to register, file returns and determine the taxability of products and services both purchased and sold. The software has to be set-up properly to manage the thousands of state and local jurisdictions' tax information. Plus, tax laws and interpretations change daily so continual review is needed for proper compliance.
The Act represents a huge and fundamental departure from the collection requirements that have been in place for years. It has some legitimate goals, but the level of simplification and compliance costs are simply not there to support such a requirement at this time.
The Senate vote will likely occur this week. I ask that you call your Senators and Representatives and express your opposition. They are hungry for the tax dollars missed on many internet sales and eager to pass this legislation. I believe nearly every business will feel its impact! Imagine New York sending an auditor to Colorado to audit your business. Such audits already occur with some states having auditors with offices in other states. There's currently a physical presence nexus standard that generally applies, but not if the Act passes!
If you don’t know who your representatives are click: http://whoismyrepresentative.com and enter your zip+4. I’d suggest a phone call at this point since the Senate vote may shortly occur. Senator Reid’s office can be reached at in D.C at 202-224-3542 or www.reid.senate.gov/contact.
I can’t address all the issues in this blog, but please feel free to contact me directly at [email protected].
Thank you.
Alan Smith
Sales Tax Colorado, LLC
No Solicitiations.