American Catalog Mailers Association building case against Wayfair decision
The American Catalog Mailers Association (ACMA) is building a case against South Dakota v. Wayfair, Inc., the June 2018 decision by the Supreme Court of the United States that allows states to tax remote sales. If it can gather enough evidence, the ACMA will bring the case to Capitol Hill.
In an email sent to retailers last month, the group requested “detailed accounts” of remote sellers’ efforts to comply with varying state sales tax rules: “ACMA needs multiple case studies that can be taken to the Hill demanding attention and action from Congress.” The goal? Convince Congress to “rein in the states and address sellers’ concerns.”
It seems the ACMA won’t ask Congress to prohibit the taxation of remote sales. With 42 states and the District of Columbia already requiring out-of-state sellers to collect and remit sales tax, that ship has sailed. Rather, it’s seeking “restrictions on states’ remote sales tax rules.”
Different product taxability definitions and rules, various sales tax holidays, and other aspects of state sales tax laws make compliance burdensome and costly for out-of-state businesses. The ACMA wants “considerable simplifications so our members and other remote sellers can handle this properly.”
Yet the ACMA acknowledges that some states, particularly the 23 members and one associate member of the Streamlined Sales and Use Tax Agreement (SST), have taken steps to reduce the complexity and cost of compliance for remote sellers. SST states provide centralized tax administration, uniform product definitions, audit protection for certain remote sellers, and more. They also encourage the use of sales tax software, like Avalara AvaTax; sales tax software can greatly reduce the burden and cost of sales tax compliance.
In fact, businesses that qualify as a volunteer seller in SST states are eligible to receive the services of a Certified Software Provider (CSP) for free or at a reduced cost. Though it isn’t an SST state, Pennsylvania offers a similar CSP program; several other states are developing CSP programs of their own.
It will be interesting to see if the ACMA obtains enough evidence to ask Congress to limit state taxing authority. In the meantime, businesses have no choice but to comply with it as required by state law.
For a deeper understanding of the remote sales tax requirements sellers must contend with, see our seller’s guide to nexus laws and sales tax collection requirements.
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