DMA Releases Statement Regarding New York State's New Policy to Tax Out-of-State Marketers

Washington, DC, November 14, 2007 — Governor Spitzer’s New York Department of Taxation and Finance has issued a new regulation that requires out-of-state marketers to begin collecting state sales tax on deliveries made into New York based merely on a link to their website.

In response, Direct Marketing Assocition (DMA) Executive Vice President for Government Affairs & Corporate Responsibility Steven K. Berry issued the following statement:

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It is unfortunate and particularly ill-timed to impose a legally questionable tax collection responsibility just as companies are headed into the all-important holiday season. This is an overreach of authority that will harm consumers and merchants both in New York and nationwide. Businesses depend on a robust fourth quarter to meet payrolls and operating expenses. The last thing businesses or consumers need is uncertainty in the marketplace.

We are very disappointed that Governor Spitzer and the New York Department of Taxation and Finance have just put forward a new directive attempting to require out-of-state sellers to collect sales tax on deliveries into New York State. This directive goes against the US Supreme Court’s landmark Quill decision, and thus would not survive legal scrutiny.”

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About Direct Marketing Association (DMA)

The Direct Marketing Association (www.the-dma.org) is the leading global trade association of businesses and nonprofit organizations using and supporting multichannel direct marketing tools and techniques. DMA advocates standards for responsible marketing, promotes relevance as the key to reaching consumers with desirable offers, and provides cutting-edge research, education, and networking opportunities to improve results throughout the end-to-end direct marketing process. Founded in 1917, DMA today represents nearly 3,600 companies from dozens of vertical industries in the US and 50 other nations, including a majority of the Fortune 100 companies, as well as nonprofit organizations.

In 2007, marketers — commercial and nonprofit — are forecast to spend $173.2 billion on direct marketing in the United States. Measured against total US sales, these advertising expenditures will generate approximately $2.025 trillion in incremental sales. In 2007, direct marketing will account for 10.2 percent of total US gross domestic product. Also, there are today 1.6 million direct marketing employees in the US alone. Their collective sales efforts directly support nearly 9.0 million other jobs. That accounts for 10.6 million US jobs.

The Power of Direct: Relevance. Responsibility. Results.

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