Beyond the SCOTUS case in South Dakota, the ACMA has sued several rogue states seeking to sidestep the Quill precedent. (SCOTUS’s ruling in the Quill decision upheld a 1967 ruling in National Bellas Hess v. Department of Revenue of Illinois.) Through our True Simplification of Taxation (TruST) coalition, in concert with NetChoice, the Data & Marketing Association and Electronic Retailing Association, we’ve fended off several bills that would have submarined the catalog and e-commerce sectors as of 2013. That year, the Marketplace Fairness Act passed out of the Senate by an overwhelming 69-27 vote. At the time, we were urged to give up any hope of maintaining the Quill precedent. Yet, against all odds, we’ve “won” at every juncture since. Ultimately this issue will be resolved in Congress, but we need more companies working with elected officials if we are to prevail in the end.
Beyond the anticipated SCOTUS decision, Congressional action is required to ultimately resolve the issue including when, or if, remote sellers must collect and remit sales taxes, or be required to do something else, such as report on customer purchases as is currently the case in Colorado and several other states.
If the High Court overturns Quill, direct marketers and e-commerce merchants across the land will have to deal with more than 12,000 separate taxing jurisdictions both prospectively, and if states/municipalities choose, retroactively from the beginning of time. This leaves open many questions:
- What are the bounds of regulation acceptable on companies without political connections or a physical presence in a state?
- What level of sales tax compliance complexity is acceptable for remote marketers?
- What past liability will be foisted on marketers?
- How many audits can be imposed?
- Without access to more neutral Federal courts, how much “objectivity” might marketers expect from local Tax Tribunals and Sales Tax Administrators in overturning their own punishing new demands, or even how responsive can out of state companies expect local officials to be in responding to them on intricacies of their varying laws, rates, definitions, sales tax holidays and remission requirements?
The Supreme Court’s abandonment of the Quill standard would portend chaos for nearly every business across the land as local authorities use their newfound power to regulate and tax companies well outside their physical jurisdictions.
A Call to Action & How You Can Help Your Cause
As both postal and sales tax issues move toward some eventual resolution soon, the questions are how painful the outcome will ultimately be and how long will it take. Both can be influenced by direct marketers, catalogers, publishers, online retailers and their suppliers — but only with steady attention, participation in the process, and a consistent message.
To be a successful lobby in Washington requires experts, researchers and highly knowledgeable outside consultants to support our policy objectives through the legislative, regulatory or agency processes. The ACMA is working both of these “perfect storms” hard. In some cases, we partner with other organizations. Companies can take on these battles on their own, but would be wiser to get involved with one or more of the associations in Washington.
It takes your attention and some money, but without either, our industry could be sunk.
Hamilton Davison and Paul Miller are, respectively, the president & executive director and vice president & deputy director of the American Catalog Mailers Association. Founded in 2007, the American Catalog Mailers Association is the only organization that advocates on behalf of the interests of catalogers and other remote sellers, and their suppliers. For more information, contact Paul Miller at firstname.lastname@example.org or 800-509-9814.