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  1. #1
    OPM and Moderator Chuck Hamrick's Avatar
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    Bipartisan Group of Senators Introduces Bill Allowing States to Close Sales Loophole
    For release: Nov. 9, 2011


    WASHINGTON – U.S. Senators Mike Enzi (R-Wyo.), Dick Durbin (D-Ill.), and Lamar Alexander (R-Tenn.) today announced that a bipartisan group of ten senators are introducing legislation today that would give states the option to collect the sales taxes they are owed under current law from out-of-state businesses, rather than rely on consumers to pay those taxes to the states—the method of tax collection to which they are now restricted.



    Under the current tax loophole, while brick-and-mortar retailers collect sales taxes from customers who make purchases in their stores, many online and catalog retailers do not collect the same taxes. Under the Marketplace Fairness Act, states would have the option to collect sales and use tax revenues from out-of-state sellers through a new, simplified tax system.


    Enzi said: “For over a decade, Congress has been debating how to best allow states to collect sales taxes from online retailers in a way that puts Main Street businesses on a level playing field with online retailers. This bill empowers states to make the decision themselves. If they choose to collect already existing sales taxes on all purchases, regardless of whether the sale was online or in store, they can. If they want to keep things the way they are, it’s a state’s choice.”



    Durbin said: “Most small business people don’t want a government handout. They don’t want special treatment. They just want to be able to compete fairly against other businesses. That’s why I have worked with Senators Enzi and Alexander to introduce the Marketplace Fairness Act – a bipartisan bill to level the playing field for local main street businesses.”



    Alexander said: “This legislation would give states the ability to close the online sales-tax loophole, created when out-of-state sellers don’t collect, and purchasers don’t pay, the state sales tax – even though they still owe it. This loophole subsidizes out-of-state businesses at the expense of Tennessee businesses and subsidizes some taxpayers at the expense of others. Tennessee is losing hundreds of millions of dollars that could be used to improve services or avoid a state income tax. The legislation addresses a states’ rights issue: preserving the right of states to collect – or to decide not to collect – taxes that are already owed under state law.”



    The legislation would streamline the country’s more than 7,500 diverse sales tax jurisdictions and provide two options by which states could begin collecting sales taxes from online and catalog purchases.



    States that voluntarily become Member States of the Streamlined Sales and Use Tax Agreement (SSUTA) would be able to require remote sellers to collect and remit sales and use taxes after 90 days. A total of 24 states have permanently changed their tax laws and implemented the requirements of the agreement. The agreement would help harmonize states sales and use tax rules, bring uniformity to the definitions of items in the sales tax base, reduce the paperwork burden on retailers, and incorporate new technology to modernize administrative procedures.



    States that do not wish to become members of SSUTA would be allowed to collect the taxes only if they adopt certain minimum simplification requirements and provide sellers with additional notices on the collection requirements.

    The legislation exempts sellers who make less than $500,000 in total remote sales in the year preceding the sale to qualify for an exemption and not be required to collect the tax.



    Senators Tim Johnson (D-S.D.), John Boozman (R-Ark.), Jack Reed (D-R.I.), Roy Blunt (R-Mo.) Sheldon Whitehouse (D-R.I.), Bob Corker (R-Tenn.) and Mark Pryor (D-Ark.) are also cosponsors of the legislation.



    To find out more about the specifics of the bill, click here for a section-by-section. Click here for a copy of the bill.

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  3. #2
    OPM and Moderator Chuck Hamrick's Avatar
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    I am at PubCon bouncing between sessions and wanted to thank Brian Littleton for sending me this information.

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  5. #3
    ShareASale President/CEO and ABW Veteran Brian - ShareASale's Avatar
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    Thanks for posting it up Chuck, this is huge news overall. The bill has bi-partisan co-sponsors which is really important and I think has good overall chances of success.

    The reason that I am for this personally is simple - Our industry, especially in places like Illinois/NY/NC/CA has been crushed by State-level bills that attempted to use Affiliates as establishing "Nexus" for the purpose of sales tax collection. Despite our factual presentations to States, these bills have passed with the only real outcome being the loss of income for Affiliate Marketers.

    All along, we have said that we support a Federal level solution that actually gets the job done (creates fairness, helps States collect) but doesn't do harm (hurts Affiliate Marketers).

    With this bill, Affiliates would not have to worry about State-level bills popping up everywhere because the States would have authority thru the bill - which is not tied at all to the concept of nexus or Affiliate Marketing.

    Affiliates in Illinois, NY, NC (where State-level bills) will still need to get the State-level laws repealed - and this Federal bill will give us more ammunition to do so.

    I encourage you all to read the bill and if you also support the bill - let your Senators and Representatives know.
    Thanks,

    Brian Littleton
    President/CEO - ShareASale.com, Inc.

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  7. #4
    OPM and Moderator Chuck Hamrick's Avatar
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    I have been pushing for a federal solutions so we can get back to work on affiliate marketing. I realize this may create other problems like a reduction in conversion because of the added tax to the cost of sale. Affiliate are masters of figuring out how to offer the best possible offer for a merchant and will work around this.

    Affiliates need to push this information to all state legislatures that have instituted laws or are contemplating. Could push them back from the brink.

    Brian keep us up to date of the score on this but I see it as a win-win for all sides.

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  9. #5
    OPM and Moderator Chuck Hamrick's Avatar
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    The Alliance For Main Street Fairness is calling this the Marketplace Fairness Act and supports it.

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  11. #6
    Influencer Marketing GravityFed's Avatar
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    Interesting take on this bill here: Amazon Wins. Merchants and Affiliates Lose.
    The big problem for many merchants is that the small-business exemption is a paltry $500,000.
    Seems it would be ideal if that threshold was raised a bit..
    Ebay is on the side of the good guys in this case. They are insisting that the small-business exemption should use the SBA definition of a small business, which can be as high as $30 million in annual sales.

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  13. #7
    OPM and Moderator Chuck Hamrick's Avatar
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    eBay is building resources to sell to small businesses so will benefit from this bill. If the threshold is raised to $1M then they can get more customers.

  14. #8
    OPM and Moderator Chuck Hamrick's Avatar
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    Durbin gains key support for revitalized Internet sales tax bill

    This is a simplified article on the Marketplace Fairness Act.

    The bill is backed by Seattle-based Amazon.com, which has opposed legislation in Illinois, California and other states to collect online sales taxes because of the complexity created by a state-by-state approach.
    Hoffman Estates-based Sears Holdings Corp. and other traditional retailers such as Bentonville, Ark.-based Wal-Mart Stores Inc. also back the measure.
    However, eBay Inc. still opposes the legislation, according to a tally of supporters and opponents provided by a lobbyist for interests that favor it.

  15. #9
    OPM and Moderator Chuck Hamrick's Avatar
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    Amazon bolsters lobbying force for sales tax fight
    Covington & Burlington will be lobbying for Amazon on legislation in the House and Senate, disclosure records show. The lobbying targets will be the Marketplace Equity Act of 2011, introduced by Steve Womack (R-Ark.) in the House and Mike Enzi (R-Wyo.) in the Senate.

    The registration form, which is backdated to Oct. 24, lists former deputy secretary of labor and current firm partner Roderick DeArment as one of the lobbyists on the account.

    Others in the firm working for Amazon include William Wichterman, a former special assistant to President George W. Bush, Holly Fechner, once policy director to the late Sen. Edward Kennedy (D-Mass.), and Martin Gold, former floor adviser and counsel to then-Senate majority leader William Frist (R-Tenn.)

    Amazon’s lobbying stable includes a number of other K Street firms, including The Bockorny Group, according to Senate records.

    A request for comment from Covington & Burling was denied on grounds of client confidentiality.
    Full article here:

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