The Direct Marking Association, the leading global trade association of businesses and nonprofit organizations using and supporting multichannel direct marketing tools and techniques, released the following statement following the introduction of a new Internet sales tax bill by Congressman Steve Womack (R-AR) and Congresswoman Jackie Speier (D-CA):

“The Direct Marketing Association is disappointed that Representatives Womack and Speier have introduced a bill, entitled “The Marketplace Equity Act,” that would allow States to conscript out-of-state companies to become their unpaid tax collectors. The Supreme Court in its Quill decision found that this unfunded mandate burden on out-of-state companies was a burden on interstate commerce. This bill would encourage and legalize State interference of interstate commerce.

The Womack-Speier bill would conscript out-of-state-marketers to be tax collectors for a multitude of tax jurisdictions in the U.S. The administrative burden on marketers, including smaller ecommerce marketers, would be huge. The bill does provide a small business exemption for business with gross sales under $1 million. Even a $1 million retailer with a huge 10% profit margin would have its $100,000 profit slashed to collect for the tax man. How many tax audits would the small retailer face? The Quill decision is as correct today as it was in 1992—the administrative burden on out-of-state marketers remains a burden on interstate commerce.

This bill, in the best of economic times, is bad policy—our country was founded upon a free flow of commerce among the States—but in these economic times placing unfunded mandates upon out-of-state companies is horrible policy. We need jobs not cost brakes on the fastest growing segment in our economy.

Congress should reject this effort and require the States to establish their tax collection regimes that do not interfere with interstate commerce by placing unfunded administrative burdens upon non-citizen companies.”

To learn more about DMA and their position on important policy issues like Internet sales taxes, please visit their website.