Catalogers Weigh in on Marketplace Fairness Act

May 08, 2013 3:57 PM  By

tax-burdenA group of catalogers and suppliers met with Congressional staff on Capitol Hill on Tuesday to discuss their concerns with the Marketplace Fairness Act which passed in the Senate on May 6.

The bill is now headed to the House of Representatives for a final vote before it becomes law.

The Marketplace Fairness Act would require shoppers to pay sales tax for most of their online purchases.  The law would only apply to online sellers that have sales of at least $1 million in states where they don’t have physical operations, like a store or warehouse.

“This is a crushing blow to the internet catalogers,” said William Murphy, Chief Operating Officer of Cigars International during the ACMA’s National Catalog Forum in Washington D.C.

Murphy who was one of the members of the group that met with Congressional staff said the details of the bill are not easily understood.   It will cost jobs and stifle growth, he said.

Murphy added, “Make it easy for the consumer, keep it simple by state.”

Julie Morrow, Director of Marketing for National Wholesale Company, also met with Congressional staff and said meeting with them was a wonderful experience and people were receptive to the group’s concerns for the most part.

According to Jeff Simon, Business Development Director of i-Behavior thought the Marketplace Fairness Act was too broad.   “I think the Senate bill will not survive in the House [of Representatives],” said Simon.

Simon suggested there should be some type of flat rate that comes out of the states.

Carl Szabo, Policy Counsel at NetChoice said during the opening of the ACMA’s National Catalog Forum that catalogers will get hit as hard if not harder by Marketplace Fairness Act.

“It’s a job killing bill,” said Szabo.

Many attendees during the forum discussed spreading the message of talking to legislators, coming up to creative ways to get to the consumer and how to involve social media into the mix to stop the Senate bill from passing in the House of Representatives.

“The bill needs to be simple, it is not fair to make us collect from 9600 jurisdictions,” said Szabo. “We need to simplify this and we need to bake in simplification before this bill goes forward.”

  • Barger

    The talking point of 9600 jurisdictions really needs to be given up. People don’t complain about having to keep track of every address in the US to be able to calculate shipping charges. This is because there are services that do this calculation for you. The very same is true for tax rates. Individual merchants will not have to worry about changing rates at all.

    • http://twitter.com/TractorUP1 TractorUP

      Will that same software file for us, fight audits, and pay for accounting staff? Calculating a shipping charge is not even close to the same thing as calculating an amount owed to a jurisdiction; you obviously have very little ecommerce experience.

      • Barger

        Yes, it will do filings and provide audit defense.

        • Kim Snyder

          Really? I would love to see this software please.

          • Barger

            Taxcloud.net

          • Kane Train

            Lol. You are kidding right? That is going to remit taxes to 46 states and fight a parade of auditors from 46 states? You are funny.

          • Barger

            Yep

    • Kane Train

      Do you work for Amazon or Walmart to disseminate these falsehoods? Or are you really this confused?
      This bill is an attempt by Walmart and Amazon to monopolize the online retail market.
      Period. End of story.

  • Pingback: Marketplace Fairness Act | Marketsmith, Inc

  • Brian

    Shipping charges are typically calculated by orders value, not by complex shipping equations.

  • Kane Train

    Why would catalogers be so opposed to this if it only applies to online sellers? That’s right… because it actually applies to anyone and everyone who sells across state lines.
    This is a nightmare for small business everywhere and a boon to Walmart.
    Its David (small biz) vs Goliath (walmart) all over again… cept Goliath is trying to convince everyone that HE is somehow the underdog. What a nightmare.

  • http://www.facebook.com/people/Ronald-G-Nixon/1042174097 Ronald G. Nixon

    A Fair and Simple Way to Level the Playing Field for Online Sales.

    SUMMARY:

    By eliminating sales and use taxes, using existing technology, and requiring EVERYONE to pay a Processing Fee (PFE); we simplify life for all retailers and generate needed income for individual states.

    Apply this immediately to Amazon, Wal-Mart and all online sellers whose gross sales exceed one million dollars a year.

    Fine tune the process and then start reducing the annualsales level until EVERYONE who sells anything on the Internet is paying.

    THE PROCESS:

    1. Eliminate all online sales and use taxes.

    2. Impose a Processing Fee (PFE) on every sale made – no exceptions. (This is a fee not a tax.)

    3. Every time an online sale is made by Amazon (Wal-Mart, Target, etc.,) a % of that sale is transferred into a holding account. Once the processing fee is deposited in the holding account, it cannot be reversed. PFE is based on the total amount of the sale including processing fees, handling fees, etc.

    No matter what Amazon calls it, PFE is charged for the total amount of money the customer pays for his or her purchase.

    4. At midnight, the holding account is transferred to a Federal computer.

    5. The Federal computer takes the money received and immediately transfers it, less an agreed upon processing fee that pays for the computer, to individual state computers based on a distribution formula agreed to by the individual states. (Individual states distribute their loot any way they want to.)

    6. Once this works properly for Amazon, the one million in sales cutoff should be dropped to 500,000 and then to progressively lower amounts. Within a few years EVERYONE selling on the Internet will pay their fair share in processing fees. Since the PFE goes to a Federal computer, anyone trying to beat the system should be charged with a Federal crime and vigorously prosecuted.

    If elected officials don’t spend the money faster than it is collected, the % should be lowered as more and more businesses begin paying PFE. (Every business selling on the Internet, NO EXCEPTIONS, will pay a PFE.) If you object to paying PFE, for any reason, don’t sell or purchase via the Internet.

    Cost of collecting and processing PFEs should be minimal for both government and private businesses. You won’t need lawyers and accountants to figure out how to beat the system. You sell anything on the Internet and you pay PFE. You try to beat the system and you deal with the IRS or another Federal agency.

    Companies who work with affiliates (Amazon) and companies like PayPal who offer shopping carts, would collect a PFE for every transaction. This would eliminate everyone using these systems from the burden of collecting and disbursing PFEs for those sales. (And immediately start collecting revenue from small sellers who have avoided collecting and reporting sales taxes on their sales.)

    BENEFITS:

    No tax tables, of any kind, required.

    Individual states have a daily stream of incoming revenue.

    The Federal computer and its SMALL staff is paid for by an agreed upon processing fee.

    Amazon and other big corporations pay their fair share and are prevented from playing games with their books to avoid paying PFE.

    Each business decides whether to pass the PFE on to its customers or absorb the fee internally.

    Customers choosing to purchase via the Internet would be subject to brick and mortar sales tax rules and fees. Everyone selling anything on the Internet would pay PFE. (Whether or not PFEs would be a business deduction would up to individual states and the Federal government.)

    Everyone selling on the Internet should be subject to the same rules and fees; but, they have to be understandable, simple to administer and affordable for all businesses.

    This system is simple, easy to implement with our modern technology, and can operate independently of the current complicated sales tax systems that small and big business have to deal with on a daily basis.

    Small businesses are not asking for favors, we just want a fighting chance, a reasonably level playing field, and a collection process that doesn’t cost more than we can afford.