Petition Announced in Support of Bill that Helps Protect Consumer Privacy

SEATTLE, Sept. 1 /PRNewswire/ -- The Federal Tax Authority (FedTax.net) has launched an online petition for consumers and retailers to demonstrate support for the Main Street Fairness Act and its protection of anonymity on internet sales.  

The Main Street Fairness Act (H.R. 5660), currently before Congress, will modernize and simplify existing sales tax collection laws and therefore eliminate the need for states to enact reporting laws that may threaten consumer privacy. It also has the potential to deliver billions of dollars in sales tax revenue to local communities—without raising taxes or creating a new tax.

Introduced by Congressman William Delahunt (D-MA), the Main Street Fairness Act would allow states to require out-of-state retailers (except for small businesses, which are exempt) to collect sales tax. Under current laws, consumers are responsible for reporting and submitting the sales tax due on their online purchases. However, because so few consumers send in those taxes, there is a growing trend among states to require internet merchants to report consumers' purchases to state revenue agencies—a practice that some consumer advocacy groups believe violates consumers' privacy. With records of consumers' online purchases in hand, states can pursue individuals to collect the sales tax due on their online purchases.

By shifting the remittance of sales tax from consumers to retailers, the Main Street Fairness Act makes reporting customers' purchases to the state unnecessary. Once the Main Street Fairness Act becomes law, consumers will no longer be expected to track every internet purchase, and they will not have to worry about their online purchases being reported to the government.

"We can already see what's going to happen if the Main Street Fairness Act doesn't pass," said R. David L. Campbell, CEO and co-founder of FedTax.net. "States have already started requiring online merchants to report on their consumers' purchases. They're facing tremendous budget shortfalls and they're looking for ways to enforce the current law. But collecting personally identifiable information about online purchases is the wrong way to go—it violates consumers' privacy."

Colorado now requires internet retailers to provide the state's department of revenue with a year-end list of consumers' purchases. Other states, such as California and Oklahoma, have considered similar legislation.

North Carolina is currently requesting information from Amazon.com about its customers' purchases as part of the state's efforts to collect sales tax on internet purchases. Amazon and the ACLU have filed suit against North Carolina in response, claiming that the state's request violates customers' privacy. Katy Parker, legal director of the ACLU of North Carolina Legal Foundation, told the Charlotte Business Journal, "There is no legitimate reason why government officials need to know which North Carolina residents are reading which books or purchasing which specific brands of products."

In addition to protecting consumer privacy, the Main Street Fairness Act benefits local communities by providing a way for them to receive more sales tax revenue, which pays for services such as schools, police, and libraries. The decline in sales tax revenue over the last ten years is directly related to the increase in online sales. According to a 2009 University of Tennessee study, uncollected sales tax on online purchases will reach $8.6 billion this year alone.

Supporters of the bill argue that it would close a tax loophole that hurts local businesses. Bricks-and-mortar retailers are required to collect sales tax on every purchase, while online retailers are not. The Main Street Fairness Act, say supporters, would level the playing field.

Critics argue that calculating sales tax for all the tax jurisdictions across the nation would be too difficult for online retailers. Not so, says Campbell. "Technology today enables anyone with an entrepreneurial spirit to open an online store. Similar technology also makes it easy to calculate sales tax. It's no more complicated than calculating shipping costs or using any of the other sophisticated, location-based features now common in internet shopping carts."

FedTax.net's own TaxCloud service, which is free to merchants, is designed to help online retailers calculate, collect, and remit sales tax. Merchants who sign up with TaxCloud can instantly calculate the sales tax due on any transaction for over 13,000 tax jurisdictions.

Consumers and retailers who want to help protect consumers' right to privacy can go to YES5660.com to find the internet petition in support of the Main Street Fairness Act.

About FedTax.net

The Federal Tax Authority (FedTax.net) is a private company that is committed to making it easy for online merchants to calculate, collect, and remit sales tax. It was founded by technology veterans with extensive experience in the large-scale development, deployment, and support of internet-based services in environments with extremely high transaction volumes and financially sensitive information. The management team has been directly involved in building some of the most recognizable brands in e-commerce, including MasterCard, Google, Microsoft, and Expedia.

FedTax.net has been designated a Certified Service Provider by the Streamlined Sales Tax Governing Board. The company's TaxCloud service enables e-commerce retailers to easily calculate and remit sales tax across the country. TaxCloud is free to merchants and can be easily integrated into virtually any accounting or e-commerce shopping cart system.    

FedTax.net is headquartered in Seattle, Washington, and has an office in Stamford, Connecticut.

SOURCE The Federal Tax Authority