What You Should Know About Potential Federal Tax Law Changes — and How to Be Proactive

TaxElections are over and now it’s time to start thinking about how sales tax laws might impact your business moving into the new year. The Dingley Press is a member of the American Catalog Mailers Association (ACMA), a postal-reform lobby group that advocates for catalogers on taxation issues, among other concerns. During 2012, cross-state taxation became an issue yet again.

A detailed article by NetChoice explains that a group of the nation’s governors, state legislators, and state tax administrators are once again asking the United States Congress to require catalog companies, online retailers, and live television shopping networks to collect sales tax from their customers, even if they live in states where the retailers have no operations.

Currently, all retailers must collect taxes on sales in a state where they have a physical presence. The Supreme Court has held that it would be a burden to force retailers to collect and remit taxes for sales in states where they are not located. Yet Congress is again looking at legislation that would force eCommerce retailers to collect those taxes, claiming it will help brick-and-mortar stores compete more effectively with Internet retailers.

There is momentum behind federal legislation on Internet sales, primarily backed by large retailers that can afford to spend big money on lobbying. The ACMA, however, is arguing that there should be true tax simplification instead — and that eCommerce retailers should be protected in several ways if federal tax laws do change.

Take action

At the fall NEMOA conference, Steve DelBianco, executive director of NetChoice, spoke about the pending legislation. DelBianco outlined actions that eCommerce retailers should take to protect themselves if the legislation passes.

Demand true simplification. DelBianco encourages eCommerce retailers to push Congress for specific line items such as:

  • A single tax rate per state for remote sales
  • A single set of definitions for all states
  • Common sales tax returns for all states
  • Software provided by the government for rates, filing, and payment
  • A single rule for sourcing sales
  • The option to honor tax holidays and thresholds
  • A single audit for all states

Demand compensation and protection. In addition, DelBianco thinks eCommerce retailers should push for federal protections such as:

  •  Compensation for tax collection
  • Immunity for errors in state tax software
  • The ability to hear challenges in Federal District Court
  • The ability to pre-empt state laws imposing tax obligations where the retailer does not have a physical presence
  • Exemptions for small businesses

We encourage you to become informed about this issue and participate in the process. Make your own voice is heard by becoming involved in ACMA and/or contacting your state’s representatives and senators to let them know how your business will be impacted. Learn more about ACMA here.

About the Author: Jim Gibbs

Vice President of Sales & Marketing at The Dingley Press. Jim has been with Dingley since 2002 and lives in Maine near our Lisbon, Maine plant location.