NAA sends hearing request letter to U.S. House Judiciary Committee

The NAA Sales Tax Task Force has been busy the past few weeks, including writing a formal request for a hearing on H.B. 6824 to U.S. House Judiciary Committee Chair Bob Goodlatte.

By NAA Staff

Through ongoing work by the NAA Sales Tax Task Force, the National Auctioneers Association – delivered a letter in early October to U.S. House Judiciary Committee Chair Bob Goodlatte. 

Aimed at moving the legislation out of Committee to the House of Representatives floor, the letter – signed by NAA President Tim Mast, CAI, AARE, and NAA CEO Hannes Combest, FASAE, CAE – formally requests a hearing on House Bill 6824 – Online Sales Simplicity and Small business Relief Act of 2018.

If passed, the bill would pause any states’ efforts to begin enforcing the collection of interstate sales tax until January 2019. It also would not allow state to retroactively collect interstate sales tax.  

The bipartisan bill is the direct result of efforts begun by NAA in September during the 2018 Day on the Hill event.

In full, the letter says: 

Dear Chairman Goodlatte, 

On behalf of the National Auctioneers Association (NAA) and small businesses throughout the United States, we formally request the House Judiciary Committee hold a hearing on H.R. 6824 – Online Sales Simplicity and Small Business Relief Act of 2018. 

Since the South Dakota v. Wayfair, Inc. Supreme Court ruling, 32 states have active or pending legislation that allows for non-uniform standards, including differing effective dates, varied exemptions, and collection of retroactive sales tax. 

U.S. Congressman Bob Goodlatte.

Congress has the power to ensure that states do not place harsh, undue burdens on interstate commerce by passing H.R. 6824.

This bipartisan bill – sponsored by Rep. F. James Sensenbrenner, Jr., and cosponsored by Rep.  Anna G. Eshoo, Rep. Jeff Duncan, Rep. Zoe Lofgren, and Rep. Jim Banks – mandates that states wait until January 1, 2019, before they can begin enforcing the collection of interstate sales tax. In addition, it establishes a nationwide, uniform, small-business threshold and would not allow states to retroactively collect interstate sales tax until the states create uniform regulations.

Auction companies are small businesses, with 70% of NAA members having four or fewer employees. Ninety-four percent have fewer than twenty employees. Economically, an NAA survey showed 75.6% of members have revenues under $1 million, including 33.7% under $100,000. Businesses this size often operate on razor-thin margins, and most lack in-house expertise for multi-jurisdiction tax compliance and the resources to hire new staff to handle compliance issues. According to the Aberdeen Group, the average cost of employees dedicated to sales and use tax management is already over $63,000 per year for small businesses. 

South Dakota v. Wayfair, Inc. created an environment of non-standardized tax compliance, which already has led to 32-plus different sets of regulations. This is unfairly burdensome on a small business that does not have the money, time, and knowledge necessary to comply. For example, one NAA member’s company remitted sales tax to approximately 200 different tax jurisdictions in 2017. The total compliance software cost to manage that burden was estimated to be approximately $25,000. 

This same small auction business has been given little or no time to restructure its business logistics to meet immediate effective dates and unrealistic thresholds. It is already behind the curve and faces immediate hardship as its small staff must now focus on learning how to manage and comply with sales tax tasks instead of serving current customers and growing its business.

Without the passage of H.R. 6824 or similar protective legislation, small businesses, including many auction companies, may suffer catastrophic damage, both to their ability to serve interstate customers and to survive overall. Small businesses need H.R. 6824 so that states have the necessary time critical to developing and implementing a fair sales tax system, without imposing unreasonable burdens to collect sales tax retroactively on prior sales. 

Please help small businesses by holding a House Judiciary Committee hearing for H.R.6824. If we can be of any assistance and support, please contact NAA CEO Hannes Combest at (913) 563-5423 or hcombest@auctioneers.org.

As of this writing, the letter had been delivered, with NAA waiting for a response. 

Meanwhile, the Streamlined Sales Tax Governing Board has certified several companies as Certified Service Providers. You can see that list at streamlinedsalestax.org and typing “certified service providers” in the search bar at the top of page. Please see auctioneers.org/auction-tax for all information and future updates regarding South Dakota v. Wayfair, Inc.