A SHOTGUN WEDDING

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The direct marketing industry has a tough battle on its hands. The fight centers around a U.S. Senate bill that could force catalog houses and other direct response merchants to collect out-of-state sales taxes for all the goods they ship to customers across the U.S.

There's a lot to be upset about. If they're on call as collectors for up to 6,100 different state and local governmental bodies that levy sales taxes, is there energy left for direct merchants to do anything else-like sell?

Until recently, federal courts protected direct merchants from out-of-state sales tax collectors. With court protections now gone, the Senate bill offered by Sen. Dale Bumpers (D., Ark.) would now set the rules for what amounts to a shotgun marriage of direct merchant and state tax agents.

If the Bumpers bill passes, the only break for direct response merchants is that they can choose between keeping up with thousands of different sales tax rates or paying a standard "in-lieu" fee in states with multiple sales tax levels.

Sen. Bumpers, head of the Senate Committee on Small Business, sees his bill ensuring that "mail-order companies and Main Street retailers compete on an equal basis." That obviously appeals to Main Street, which would welcome anything that crimps direct response competition.

Yet the Bumpers bill ignores the fact that direct marketers' shipping and handling charges already tend to even things up with the local sales taxes retailers must charge.

Moreover, the sales taxes Main Street retailers collect help maintain the retailers' streets and communities and protect their property. Although out-of-state direct marketers receive no palpable benefits in kind, it can be argued that their customers do.

While something like the Bumpers bill may eventually pass, it should drop its masquerade as the "Tax Fairness for Main Street Business Act of 1994." Fairness isn't what this is about.

The Bumpers bill is simply a sop to retailers, a windfall for state governments and a further tax burden on the millions of people who enjoy the convenience of shopping from their homes.

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