Overstock.com, Inc. (NASDAQ:OSTK) spoke in favor of H.R. 2887, The
No Regulation Without Representation Act, introduced by Rep.
Sensenbrenner (R-WI) today.
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 Jonathan Johnson. “Under the states’
schemes of collecting at each customer’s residence, a remote
retailer faces a morass of more than 12,000 state and local tax
districts—all with special, ever-changing provisions, and each with
individual audit authority. Imagine being subjected to 12,000 tax
audits!”
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, U.S. Supreme Court decisions
forbid states from forcing these retailers to collect sales
tax.
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 Supreme Court
precedents hoping to provoke Congressional action.
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. Jason Chaffetz
(R-UT), and The Online Sales Simplification Act of 2016, circulated
in a discussion draft last year by Rep. Bob Goodlatte (R-VA), Chair
of the House Judiciary Committee. The company sees both these
measures, as proposed, as offering states what they need, but not
at retailers’ expense.
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
Senate-passed Market Place Fairness Act of 2013 because it failed
the fairness test by having a discriminatory effect on remote
sellers and it offered no real tax simplification.
About Overstock.com
Overstock.com, Inc. Common Shares (NASDAQ:OSTK) /
Series A Preferred (Medici Ventures’ t0 platform : OSTKP) / Series
B Preferred (OTCQB:OSTBP) is an online retailer based in Salt Lake
City, Utah that sells a broad range of products at low prices,
including furniture, décor, rugs, bedding, jewelry, electronics,
apparel, and more, as well as a marketplace providing customers
access to hundreds of thousands of products from third-party
sellers. Additional stores include Worldstock.com, dedicated to
selling artisan-crafted products from around the world by giving
them access to our national customer base. Forbes ranked Overstock
in its list of the Top 100 Most Trustworthy Companies in 2014.
Overstock regularly posts information about the company and other
related matters under Investor Relations on its website.
O, Overstock.com, O.com, O.co, Club O, Main Street
Revolution, Worldstock and OVillage are registered trademarks of
Overstock.com, Inc. O.biz and Space Shift are also trademarks
of Overstock.com, Inc. Other service marks, trademarks and
trade names which may be referred to herein are the property of
their respective owners.
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 December 31,
2016, which was filed with the SEC on March 3, 2017, and any
subsequent filings with the SEC.
Media Contact:
Mark Delcorps
+1 (801) 947-3564
pr@overstock.com
Investor Contact:
ir@overstock.com
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