NEMOA Attendees Take Different Sides on Proposed MFA Legislation

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Attendees at NEMOA’s directxchange conference in Boston last week offered their reaction to the Marketplace Fairness Act (MFA) being back on the table in the Senate.

A bipartisan group of senators re-introduced the bill last week, which would allow local brick-and-mortar retailers to compete on a level playing field by imposing a sales tax on ecommerce purchases made from out-of-state sellers.

Alex Vogel, co-founder and managing partner of VogelHood Research, a Washington-based policy analytics and research firm, spoke at NEMOA and encouraged retailers to make their voices heard on the MFA.

“This issue is what we used to call friend-on-friend violence,” said Vogel.  “The Senate says they aren’t voting on it until the (House of Representatives) goes first.”

Vogel said there are very powerful members of Congress that want to move this bill.

“This is the kind of bill that if it goes through the legislative process, it will become law,” he said. “The President isn’t going to veto it. I think we are on the path of tax reform.”

The act would give states the option to require out-of-state businesses, such as those selling online or through catalogs, to collect and use taxes already owed under state law, the same way local businesses do.

“To some extent we feel that something is inevitable, something is going to happen,” said Dana Pappas, chief operating officer of Plow & Hearth, who is also the president of NEMOA.

Pappas said while he knows it is called the MFA, it may not really be fair depending on how it eventually turns out.  He added it will be difficult for merchants to have their voices heard and influence the outcome once the legislative process starts moving ahead, so it’s important for them to “do the legwork now.”

“We’re okay with it if it’s going to impact everyone the same, because then there is no disadvantage,” Pappas said. “To that extent, if it’s an even playing field we’re ok with it but we’re taking the long-range thought on staying in touch with and involved in the topic.”

Jim Feinson, CEO at Gardener’s Supply, agreed, saying the act could have an incredible impact on the retail industry so direct marketers need to get engaged.

“It sounds good on the surface but the devil is in the details,” Feinson said. “It will be an unbelievable burden on us and customers.”

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