When I tell people about AmeriMark Direct and the significant number of handwritten catalog orders we receive through the mail each year, they’re typically shocked. They then look at me like I’m about to brag that we also have running water and electricity.
But at AmeriMark, we’re anything but old-fashioned. We’re a direct marketing company with 10 distinct catalogs striving to serve the needs of our older, value-conscious customers. Last year, more than one-third of our orders — nearly 3 million — were made by people who filled out an order form and mailed it in.
Unfortunately, the Marketplace Fairness Act is poised to crush that statistic, and unless we contact our elected officials and demand sensible simplifications, it will start a snowball effect that will destroy customer loyalty, dismantle honorable businesses and eliminate jobs. My biggest fear, though, is that the act will frustrate and disenfranchise millions of seniors who depend on catalog purchases to help make their lives safer, easier and more enjoyable.
The Marketplace Fairness Act was pushed through the U.S. Senate in May and is under consideration in the House. It requires “remote sellers” (including catalog retailers and online stores) doing $1 million of revenue or more annually to collect taxes for every state, Indian tribe, and jurisdiction where they have customers. For the record, that’s more than 10,000 tax jurisdictions, each having its own rates, definitions, exceptions, tax holidays, and product exemptions.
Consider this example: A woman in New York orders a dress, a pair of shoes, a diet supplement and a blood pressure monitor from one of our catalogs. I’m an accountant by training and it took me more than 20 minutes to calculate the taxes, and I’m still not sure I got them right.
When I learned about the Marketplace Fairness Act, I summarized all the possibilities nationwide for our mail-order customers. Our best solution so far is a 40-page (and growing) insert of tax rates and exceptions that customers would use to calculate taxes for their mail orders.
This insert — which is almost as large as some of our catalogs — would take the place of two small boxes on our current order form. I can’t even begin to imagine how many customers will become so frustrated by the inconsistent and tangled state taxes that they simply will give up and stop ordering.
The act’s backers aren’t concerned with that, though. They talk about needing to level the playing field to benefit local vendors who are forced to charge sales tax. But you can’t achieve fairness if you impose a tax system that is so confusing that millions of discouraged buyers stop ordering by mail altogether and compliance is so expensive that it leads to increased costs, which bleed down to customers. This hardly levels the playing field.
The Marketplace Fairness Act also will create compelling uncertainty for AmeriMark. The unknown impact on catalog mail orders, coupled with the act’s compliance costs, may significantly shrink our company, resulting in employee layoffs and decreased product offers to our senior customers. When Congress debates the act, it must not do so in a vacuum, but through the context of the millions of families that will be negatively affected.
Fortunately, the Judiciary Committee has released a set of principles to guide the discussion in the House, and they want to hear from you. Before the act is passed, we must contact our elected officials, including chairman Bob Goodlatte of the House Judiciary Committee, and insist on common sense simplifications such as a single rate per state, consistency of holidays and exemptions, a single audit covering all states, and reimbursement for integrating and maintaining a single national software platform.
Ultimately, the Marketplace Fairness Act will impact all of us, either personally or through a friend or family member who relies on the ease of shopping by mail and the products and services that catalogs provide. I will continue to fight for what’s best for them and what makes sense for our economy. I guess that makes me a little “old-fashioned” after all.
(Louis Giesler is president of AmeriMark Direct in Cleveland.)