Daily Tax Report: State provides authoritative coverage of state and local tax developments across the 50 U.S. states and the District of Columbia, tracking legislative and regulatory updates,...
By Tripp Baltz
The direct marketing industry is reaching out to a key multistate tax group with a proposal on how to “ease the burden” of an increasingly busy state online sales tax landscape on sellers while also benefiting states, Bloomberg Tax has learned.
George Isaacson of Brann & Isaacson in Lewiston, Maine, the attorney for Wayfair Inc. in the online retailer’s case against South Dakota that just made it to the U.S. Supreme Court, told Bloomberg Tax July 24 that several direct marketing groups are planning to “explore the possibility of commencing a dialogue with [Multistate Tax Commission] leadership for reaching a consensus on simplification and uniformity measures that would ease the burden of multistate sales tax collection by remote sellers, while enabling states to obtain the tax due on purchases by their residents.”
Issacson, who also represented the Data & Marketing Association in earlier cases about state online sales tax schemes that ended up before the U.S. high court, said he will be joined by the presidents of the American Catalog Mailers Association and NetChoice at a session on the agenda of the MTC Executive Committee during its July 26 meeting in Boston.
The June 21 Wayfair ruling—which tossed out Quill Corp. v. North Dakota, the Supreme Court’s 1992 physical presence threshold for when states can tax remote sales—has many states looking to expand their authority over online sales taxation. The majority in the 5-4 ruling suggested strongly that South Dakota’s law would pass constitutional muster; the statute imposes a tax collection threshold at 200 transactions or $100,000 in in-state sales.
The court stopped short of formally declaring South Dakota’s law valid in the absence of Quill, and the South Dakota Supreme Court still has to bless the state’s economic nexus model before it can become effective. It’s expected to do so in mid-August. In the wake of the groundbreaking decision, dozens of states that haven’t already done so are mulling whether to copy South Dakota’s law.
NetChoice, an industry association for e-commerce, has been at the heart of many of the lawsuits designed to stop states’ online sales taxation efforts. And the group is pushing Congress to act to limit states’ authority, which it joined others in doing at a July 24 House Judiciary Committee hearing on the post- Wayfair landscape.
Specifically, the groups are all concerned about how to simplify sales tax administration and how to work toward greater uniformity in the wake of Wayfair.
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