State Sales Tax on E-commerce on Its Way?
Because one state, Colorado, can now require out-of-state sellers such as e-commerce marketers to disclose what its buyers purchased for purposes of taxation, more states may do the same, worries the Data and Marketing Association (DMA, formerly Direct Marketing Association).
DMA emailed Target Marketing a statement yesterday saying that the U.S. Supreme Court declined to hear DMA’s “challenge to Colorado notice-and-reporting requirements on out-of-state sellers.” When SCOTUS declines to hear a case, it means the previous decision stands. The previous decision allowed Colorado the wherewithal to implement its sales tax.
“We are disappointed the Supreme Court did not take the case and are concerned it will only encourage other states to adopt similar laws and regulations that are designed to put arbitrary burdens on out-of-state sellers,” states Emmett O’Keefe, DMA’s SVP of advocacy. “This is an issue Congress should address, as the Constitution explicitly gives the legislative branch the authority to regulate interstate commerce.”
As Doomsday as this comment may sound, DMA has had a victory in this realm. A March 2015 decision by SCOTUS upheld DMA’s argument that marketers should be able to bring federal lawsuits against state tax laws.
Still, that didn’t seem to alleviate the sting.
“The state law at issue would require out-of-state sellers to file reports with state tax authorities describing purchases made by Colorado residents,” DMA states.
The association worries that this law could hurt the data-driven economy that DMA’s CEO Tom Benton says “has far outpaced the overall economy and is vital component of interstate commerce.”
What do you think, marketers?
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