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DMA Testifies Against Streamlined Sales and Use Tax Agreement Before Florida Taxation Commission
DMA Calls on
Washington, DC, January 17, 2008 — Testifying this afternoon before the Committee on Finance and Taxation of the Florida Taxation and Budget Reform Commission, the Direct Marketing Association (DMA) strongly urged the State of
“Joining the Streamlined Sales and Use Tax Agreement compact is a lose-lose proposition for
According to Micali, one key reason a state would adopt the SSUTA is to be able to force a company to collect sales taxes even if the company had no physical presence in the taxing state.
However, in an attempt to garner support for the compact, Micali pointed out that SSUTA’s proponents have drastically overestimated the amount of uncollected sales tax that would result from online sales. Moreover, he said, this concept is based on the premise that Congress will eventually grant the states legislative authority to mandate such tax collection.
In its 1992 Quill Corp. v. North Dakota decision, the US Supreme Court ruled that, absent Congressional approval, states cannot impose sales tax collection duties on out-of-state companies without a physical presence or “tax nexus” in the taxing state. In the 16 years since the Quill decision, legislation to overturn Quill, and thus mandate sales tax collection, has failed to pass out of any US Senate or House subcommittee or full committee.
In his testimony delivered personally this afternoon in Tallahassee, FL, Micali added, “If Florida were to join the SSUTA the state would face a potential loss of sales tax revenue in the tens of millions of dollars due to a number of mandated requirements within the compact.” Furthermore, he said, “From the point of view of what is in the best interest of creating a 21st century, Internet-friendly tax regime to encourage economic growth throughout the national marketplace, SSUTA again fails — in fact, it fails dramatically.”
Micali said DMA and its membership remain adamantly opposed to the SSUTA, and believe the Internet should remain free from burdensome taxes in order to ensure its continued growth and viability.
“The SSUTA is a document drafted by tax administrators, and as might be expected, it resulted little in the way of tax simplification,” Micali told the
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
In 2007, marketers — commercial and nonprofit — spent $173.2 billion on direct marketing in the
The Power of Direct: Relevance. Responsibility. Results.
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