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FedTax Rebuts NetChoice and TechAmerica Misinformation Campaign on Main Street Fairness Act
Aug 18, 2011 (04:08 PM EDT)
New Legislation Will Make Sales Tax Collection Simpler
SEATTLE, Aug. 18, 2011 /PRNewswire/ -- FedTax has issued a rebuttal to the misinformation and scare tactics being used by NetChoice and TechAmerica in an effort to derail the Main Street Fairness Act, which was introduced on July 29 in the Senate by Senator Dick Durbin (D-IL) and in the House of Representatives by Representative John Conyers (D-MI).
A statement issued on July 29 by NetChoice's Steve DelBianco inaccurately claims that the cost of collecting sales tax will hurt online retailers and that the Main Street Fairness Act "fails to define safe harbors for small businesses."
"Both of these claims are simply false," said Joan Wagnon, FedTax Executive Vice President and former Secretary of Revenue for the state of Kansas. "Free software is available to help retailers comply with the Main Street Fairness Act. And Mr. DelBianco's statements about nonexistent safe harbors for small business are rubbish." The Main Street Fairness Act, she explains, incorporates the Streamlined Sales and Use Tax Agreement (SSUTA), which exempts small businesses from collecting sales tax. "Section 609 of SSUTA explicitly defines a small seller exception—any retailer with less than $500,000 a year in remote sales is not obligated to collect sales tax. Furthermore, Section 610 creates a plan to compensate small sellers for any expenses incurred in conforming to SSUTA. Any retailer with less than $5 million a year in remote sales can receive up to $12,240 in reimbursements within the first six months of collection. The states developed the small seller exception and the reimbursement plan specifically to accommodate to the concerns raised by businesses during the public meetings and hearings organized by the SSUTA Governing Board, which Mr. DelBianco attended."
An August 16 letter from TechAmerica incorrectly says that the Main Street Fairness Act "would cede Congressional [sic] power over interstate commerce to the SSUTA Governing Board, a body created by a few states."
In fact, the Streamlined Sales Tax Project was created by the National Conference of State Legislatures (NCSL), the National Governors Association (NGA), forty-four states, and more than eighty-five businesses. The Governing Board, which is composed entirely of state-appointed representatives, was formed in 2005.
Ms. Wagnon, herself a former president of the Governing Board, explained, "Under the Main Street Fairness Act and SSUTA, states retain complete control of their sales tax systems. All of the states that have voluntarily adopted SSUTA's guidelines to simplify their sales tax laws have done so with absolute transparency and accountability. And every SSUTA state sends both elected officials and revenue department officials to the Governing Board to express the will and intent of that state's voters. So in fact, the Main Street Fairness Act protects states' rights and sovereignty by ensuring they determine their own sales tax rules. The states choose whether or not to adopt SSUTA guidelines, and their representatives make up SSUTA's governing body."
TechAmerica insists that keeping track of the nation's sales tax rates would adversely affect online retailers. But according to David Campbell, FedTax CEO and cofounder, "It's absurd to say that collecting sales tax would hurt e-commerce companies. The real-time shipping tasks these companies already can do are far more complex than collecting sales tax. For instance, online retailers regularly calculate shipping fees based upon the size and weight of items being purchased, the destination of the purchase, and the desired delivery speed. Calculating, collecting, and remitting sales tax is much easier—especially with services like TaxCloud available at no cost to retailers."
According to Scott Peterson, executive director of the Streamlined Sales Tax Governing Board, SSUTA's guidelines are beneficial for businesses. "SSUTA's provisions have been developed by states and businesses over the past decade to simplify sales tax collection," he said. "Instead of keeping track of a multitude of state sales tax regulations, for SSUTA member states, retailers only need to follow the guidelines in SSUTA—which means, among other benefits, they'll only have to use one tax return form for every SSUTA state. And if a business uses a sales tax management service offered by a SSUTA Certified Service Provider, they know the service has been tested and verified by every SSUTA member state."
Sten Wilson, owner of Point of View Farm, a heritage sheep farm in upstate New York, says that the Main Street Fairness Act will make it easier for businesses to comply with sales tax laws. Wilson and his wife "frequently visit festivals and fairs in other states to sell … livestock, wool, and yarn," he states. "Upon returning home from each trip, I [used to be] faced with the complex and exhausting task of … filling out all the sales tax return forms." The Main Street Fairness Act, Wilson says, would change that by providing an incentive for states to simplify and standardize their sales tax laws by adopting SSUTA's guidelines.
"The combination of . . . technology [like TaxCloud] and SSUTA's simplification measures ultimately unravels a huge web of entangling forms and paperwork, freeing businesses like mine from bureaucracy, promoting efficiency, and increasing productivity and, most importantly, profitability," says Wilson. "They make dealing with sales tax much, much easier for small business owners."
FedTax makes it easy for businesses to calculate, collect, and remit sales tax with its free TaxCloud sales tax management service. It was founded by e-commerce veterans who have extensive experience in large-scale internet services and have been directly involved in building some of the most recognizable brands on the internet, including Google, American Express, Microsoft, and Expedia.
FedTax has been designated a Certified Service Provider by the Streamlined Sales Tax Governing Board. The company's free TaxCloud service is relied upon by nearly 900 businesses to calculate and remit sales tax across the country. TaxCloud can be easily integrated into most accounting, order management, and e-commerce shopping cart systems.
FedTax is headquartered in Seattle and has offices in Connecticut and Kansas.