As a cataloger, many of your marketing efforts are likely focused on driving your catalog recipients to your online storefront. Unfortunately with the current legislation that’s cropping up in states across the U.S., this could become a complex and costly endeavor.
State-level “e-Fairness legislation” proposals are aimed at collecting sales tax from out-of-state retailers. In 1992, the U.S. Supreme Court ruled that a business must have a substantial tie to a state before being taxed at the state and local level, but as online shopping has grown, so has states’ interest in finding a way around this decision.
Colorado and Alabama are currently leading the way in tacking tax burdens onto Internet retailers, and several other states are following close behind with their own widely varying proposals. Unless Congress steps in with a motion to unify online sales-tax laws, states will continue issuing complex and contradictory legislation that promises to make operating online storefronts remarkably complicated, costly, and litigious.
Why it’s bad for business
For catalog mailers and those who cross state lines with their direct mail marketing efforts, these propositions are more than just an accounting nightmare — they pose a threat to the entire national eCommerce structure.
As more laws are passed, more businesses will inevitably realize they can’t afford disparate taxes across all 50 states. This could lead to organizations having to withdraw their sales and marketing efforts from some states entirely. If this happens, then competition will suffer, and consumers will feel the impact as product expenses and availability are impacted.
Who’s on your side
Luckily, there are people fighting against this stifling legislation. The DMA and ACMA are both aggressively challenging the onslaught of taxation proposals. Both of these organizations are interested in your support on a national level, and this post by the ACMA’s Deputy Director Paul Miller outlines why: As catalogers, we’re part of a $400 billion industry, and it’s worth protecting.
Regardless of the legal climate, The Dingley Press always has your best interests in mind.