Legal Matters: Proposed Marketplace Fairness Act Threatens Direct Marketers

The Marketplace Fairness Act does nothing to standardize the tax systems and expenses among the various states for small and midsized retailers.

Showdown is Inevitable
Large shopping center retailers don’t even try to make the claim that the Marketplace Fairness Act would lessen the burden of tax collection. Instead, their primary argument is that all sellers should bear the burden equally as a matter of fairness. However, the argument that current nexus standards result in an “uneven playing field” is based on a false premise. Bigger retailers receive numerous state and local tax benefits and other incentives to locate stores in states and communities. These include rebates of property tax, subsidies for utility lines, tax deductions for new hires, etc. On the other hand, remote sellers receive none of these government benefits. Yet they’d be burdened with collection of the tax to fund such government subsidies.