Mail-order consumers will get to keep their sales-tax break, at least for now.
A trade group said Thursday that despite discussions with states, no deal had been reached on how to collect approximately $1.2 billion in annual sales taxes from consumers who buy merchandise through the mail from out-of-state companies.Chet Dalzell, a spokesman for the Direct Marketing Association, said reports that a plan would be announced on Friday were premature. He said his group planned no announcement.
Consumers who buy from companies that sell through the mail, by telephone, cable television or over the Internet are subject to their state's sales tax, just as if they had gone to a local store. But states have no way to compel out-of-state merchants to collect the taxes on their behalf.
As a result, direct marketers and catalog retailers have generally ignored the task. State and local governments have complained that they are losing taxes on $215 billion in annual mail-order sales.
The companies have waged legal battles to maintain the exemption from collecting sales taxes, which the Supreme Court has preserved for businesses that do not have a physical presence in a state.
If there is an agreement, it would be voluntary, said Mark Slosberg, a partner at KPMG Peat Marwick in New York.
Even if there is a voluntary agreement, states might have to adopt laws involving such collections, said the marketing group.