The Marketplace Fairness Act, currently in committee, would require out-of-state retailers to collect sales taxes for products sold over the Internet, in catalogs, and through radio and TV ads. Collected sales tax would then be sent to the state where the customer resides.
ARA expressed its opposition to the proposal in a recent letter to the House Judiciary Committee. Currently, the Marketplace Fairness Act would require remote sellers of agricultural products to:
Obtain signed sales tax exemption certificate from each purchaser claiming the farming exemption from sales tax. Such certificates must be retained and produced years later for sales tax audits.
Perform analyses of each state's laws to determine qualifying products for the farming exemption in each state.
Monitor states for exemption changes resulting from new laws, regulations, court cases, and/or rulings issues by each state's tax authorities.
Although a fix through free software has been proposed, ARA is less than confident this will be inexpensive or easy to implement. H.R. 684 places a heavy burden on agricultural retailers if enacted "as is."
The costs associated with these obligations would be a major deterrent for agricultural retailers currently involved in e-commerce and it will also likely stifle innovative agribusiness expansion online.
ARA cannot support the Marketplace Fairness Act as written; however, we look forward to finding a workable solution.
Click here to read the complete letter.
Feel free to contact Jeff Sands, Director of Public Policy for the Agricultural Retailers Association at firstname.lastname@example.org or (202) 595-1705 with any questions or comments.