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DMA Fights I-Tax Bill via E-Mail

April 27, 2001

The Direct Marketing Association has received a better-than-expected response rate to a grass-roots e-mail campaign to oppose what it called a potentially disastrous Internet and catalog tax bill.

The bill, S. 512, was introduced by Sen. Byron Dorgan, D-ND. It calls for an extension of the current Internet tax moratorium, which ends Oct. 21. But it also calls for a process that would require mandatory interstate sales tax collection for companies with no "nexus" in a state without first requiring substantial simplification of the nation's 7,600 varying sets of sales tax rates and rules.

The response rate to the e-mail message has been at least 3 percent, while the DMA was expecting 1 percent, said Rick Fein, director of government affairs at the DMA. Each e-mail had a link -- which the DMA could track -- that forwarded the message to one of the recipient's senators.

According to the DMA e-mail message, the Dorgan bill would "shoot first, ask questions later, by allowing the states to go forward with their tax plan unless Congress affirmatively acts to stop the plan from going forward."

The DMA asked members to write to their senators and have them instead co-sponsor S. 288, introduced by Sen. Ron Wyden, D-OR, which would extend the current moratorium on the taxing of Internet access but would require substantial simplification of sales tax collection rules before any tax-collecting responsibilities could be imposed on national marketers.

Basically, the bill requires the states "to come up with one unified rate per state for all commerce -- retail, catalog and Internet," Fein said. "One rate per state will allow Internet and catalog companies to compete on equal footing with retail stores. It will also allow companies to survive the complexities and costs of collecting such a tax. Otherwise, it is quite probable that many companies will find it nearly impossible to compute and remit the appropriate tax for the estimated 7,600 taxing jurisdictions and the millions of different products available today.

"The Wyden bill asks the states to come up with a plan first, come to Congress, and then Congress has to approve it," he said.

Fein said the DMA sent more than 13,000 e-mail messages about the bill to members, one of the largest grass-roots campaigns the DMA has ever launched.

Fein said the campaign was launched because the Senate "is moving very quickly on the Internet and catalog sales tax issue and has already held hearings in the Senate Commerce Committee."

Supporters of Dorgan's bill include governors and city and county officials, "and they are all lined up ... on this," Fein said. "So we needed to shore up our grass roots to counteract their efforts."

The DMA also is supporting another bill expected to be introduced shortly, possibly this week, by Sen. George Allen, R-VA. This bill will ask for a straightforward extension of the Internet access tax moratorium.

Melissa Campanelli, Copyright 2001 Courtenay Communications Corporation.


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