Electronic Retailer - May 2012 - 31

aspects of a claim need to be supported. Most companies gets sued because of implied claims, so marketers need to take a hard look at their advertising – not just literal claims but also implied messages – and make sure their substantiation is buttoned up. If you’re making a health and safety claims, it’s risky to go forward today without those studies for back up.”

shipping costs and difficulty in processing returns. Changing sales tax law to end the physical presence test will disadvantage remote retailers because their customers would face the same sales tax burden without gaining any of the benefits that today comes with the local presence.” Currently, at the state level, more than 20 states, including Michigan, New

Jersey, West Virginia, Georgia, Ohio and Washington, have passed legislation to become compliant with the Streamlined Sa les a nd Use Ta x Ag reement . Legislation has been introduced in a number of other states, including Texas, Florida and Massachusetts. ERA continues to believe that this effort is punitive for the electronic retailing community.

Streamlined Sales Tax
The concept of a streamlined sales tax for online retailers is as old as the internet itself, but it has been gaining steam recently among legislators at the federal and state level, where advocates – “brick-and-click” businesses in particular, notes Brian Bieron, senior director of U.S. Government Relations and Global Public Policy at eBay – have been spending a lot of money on lobbying efforts. Streamlined sales tax legislation would, in essence, require remote sellers to collect sales taxes from customers, even if they live in states where the retailers have no operations. Currently, all retailers must collect taxes on sales in a state where they have a physical presence. Two bills were introduced to Congress toward the end of 2011. In October, Reps. Steve Womack (R-Ark.) and Jackie Speier (D-Calif.) introduced the Marketplace Equity Act of 2011. The following month, Sens. Dick Durbin (D-IL), Mike Enzi (R-WY), and Lamar Alexander (R-TN) introduced the Marketplace Fairness Act. Both bills, which are currently in committee, would grant states the authority to require outof-state retailers to collect sales tax on sales to in-state consumers. In the world of retail competition, Bieron says retailers benefit from the local facilities, whether stores, warehouses or distribution centers. “Those facilities help serve customers, and they come with a tax cost,” he says. “Remote retailers do not gain those local customer service benefits and face a different set of costs in dealing with customers remotely, including
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May 2012 | electronicRETAILER

Electronic Retailer - May 2012

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