DMA Releases Statement Regarding New York Governor Spitzer's Proposal to Tax Out-of-State Marketers

Washington, DC, January 23, 2008 — New York Governor Eliot Spitzer’s recent budget and tax proposals call for legislation requiring out-of-state marketers to begin collecting state sales tax on deliveries made into New York, based merely on a link to the marketer’s website.

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

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“It is unfortunate that Governor Spitzer has again proposed to place a legally questionable tax collection responsibility on the nation’s online retailers, especially after having abruptly withdrawn a similar proposal just two months ago under intense public criticism. Clearly, the Governor’s proposal represents an overreach of authority that will harm consumers and merchants both in New York and nationwide. Just as the nation is in the midst of a slowing economy, the last thing businesses or consumers need is uncertainty in the marketplace.

“We remain disappointed that Governor Spitzer has initiated this proposal attempting to require out-of-state sellers to collect sales tax on deliveries into New York State, and hope members of the New York Legislature will see the obvious flaws contained within this proposal. We believe strongly that the proposal goes against the US Supreme Court’s landmark Quill decision, and thus would not survive legal scrutiny.”

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 — spent $173.2 billion on direct marketing in the United States. Measured against total US sales, these advertising expenditures generated approximately $2.025 trillion in incremental sales. In 2007, direct marketing accounted for 10.2 percent of total US gross domestic product. Also in 2007, there were 1.6 million direct marketing employees in the US. Their collective sales efforts directly supported nearly 9.0 million other jobs, accounting for a total of 10.6 million US jobs.

The Power of Direct: Relevance. Responsibility. Results.

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