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|Overstock.com Supports No Regulation Without Representation Act of 2017|
The company added this bill to the list of “reasonable” federal legislation it supports to answer the increasingly contentious state tax measures designed to force remote retailers to collect local and state taxes, regardless of physical presence in the taxing state. The bill has the additional benefit of decreasing the burden of states’ recent cross-border forays into other areas of interstate commerce regulation, such as in manufacturing, labeling and product sourcing.
In recent years in the tax area, states have discriminated against remote internet retailers, attempting to force remote internet sellers into a different scheme of tax regulation, based on assessment of sales taxes at the residence of the purchaser, and not at the place of sale, as is the case in all of store-based, retail sales tax collection.
“The problem is the states want remote internet retailers to collect at the rates for the customers’ residences and not at the cash register. This significantly complicates things,” said Overstock Board member
The U.S. Constitution allows states to conscript retailers into sales tax collection, but only if retailers have “physical presence” in the taxing state. By being present in the state, retailers get many state and local benefits and have a say in representation, but a remote retailer without physical presence gets no benefit and has no representation. Therefore, where a retailer lacks physical presence,
In recent years, states reluctant to shoulder the burden of tax collection, have become more aggressive in passing legislation stretching the definition of what constitutes “physical presence.” Some have even unfairly assessed remote retailers for uncollected sales taxes, claiming after the fact, that remote retailers ought to have collected under these states’ self-serving laws establishing new and unorthodox definitions of “physical presence.” Additionally, some states openly flaunt
Maybe they now have.
“The No Taxation Without Representation Act draws a clear line, codifying what states may and may not define as ‘physical presence,’” Johnson said. “It’s reached the point where states consider virtually anything as physical presence. That’s simply not the law, and the idea that a state-created, stretch-definition can regulate interstate commerce is not only repugnant to the U.S. Constitution, but poses a threat of state cross-border regulation in many other sectors as well.”
While Overstock strongly opposes any expansion of states’ cross-border regulatory powers, Overstock supports fair federal solutions to the states’ tax collection problem. For many years, the company has worked on and supported Congressional measures to create a fair system to allow states to collect through remote internet retailers. The company supported both The Remote Transactions Parity Act of 2015, introduced by Rep.
Johnson said, “We can support these, and other measures like them, because they do the work of simplifying the impossibly complex, overlapping system of state tax collection. The successful solution must be fair and workable for states and retailers.”
The company noted it strongly opposed the
This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements include all statements other than statements of historical fact. Additional information regarding factors that could materially affect results and the accuracy of the forward-looking statements contained herein may be found in the Company's Form 10-K for the quarter ended