ACMA, DMA Form TruST Coalition to Fight Internet Sales Tax

Four prominent trade groups, including the American Catalog Mailers Association and the Direct Marketing Association, today announced the formation of a coalition titled TruST (True Simplification of Taxation) to fight pending Internet sales tax legislation.

TruST was also co-founded by NetChoice and the Electronic Retailing Association. TruST will be an ongoing resource for anyone mobilizing against new remote sales and use taxes, “which will slow and harm the growth of catalog and online retail,” according to the new coalition.

TruST was formed in advance of Tuesday’s hearing on H.R. 3179 — which would allow states to require online retailers to collect sales tax – before the House Judiciary Committee. H.R. 3179 – also known as the Marketplace Equity Act — would repeal the 1992 Supreme Court decision, Quill Corp. vs. North Dakota, which said states are not allowed to require out-of-state companies to collect sales taxes unless that company has a physical presence, such as a store or warehouse, in the state.

TruST opposes H.R. 3179 because it would overturn this 20-year-old Supreme Court-tested finding that state and local tax collections represent a de facto barrier to interstate commerce.

“The Constitutional right to sell across state lines is destroyed by more than 9,600 different taxing jurisdictions in the U.S., each with its own rates, definitions and regulations,” ACMA President Hamilton Davison said in a press release. “This is a nightmare for remote sellers, many of whom are mom-and-pop businesses without the sophistication to deal with this complexity.”

Davison added that H.R. 3179 would add less than 1% to total state and local tax revenue and crush “two entire segments of commerce that fuel our economy.”

Jerry Cerasale, the DMA’s senior vice president of government affairs, said in the release: “There are more than 9,600 taxing jurisdictions in the U.S. today. Requiring that any business — particularly a new one — be prepared to comply with the rules in all of those jurisdictions in order to do business across state lines is a precipitously high barrier and a very costly one. It would throttle new businesses before they even get off the ground.”

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