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ACMA/NetChoice Scramble to Keep Up With Growing Array of State Sales Tax Rules

To all catalog & remote marketing executives:

Here’s an extensive update of ACMA’s recent legal challenges to internet sales tax laws and regulations being pursued with our True Simplification of Taxation coalition partner organization NetChoice. Typically, these updates are sent only to Quill Defense Fund benefactors but given that state actions are now touching so many companies in the space, we are sending this to our full distribution list in hopes that more will step forward to support this effort. Currently, this work is being supported by a select few ACMA members and non-members.

Bottom line is, this is a winnable fight as we have shown. We are batting 1,000 so far and clearly have the law on our side, as has been demonstrated, but it will take continued vigilance and about another $150,000 very soon. The cost is minuscule compared to what each company will pay should we not be successful; many of you can anticipate well north of this amount in annual compliance costs. Make your funding commitment today.

Please DO keep us abreast of notices you receive from states. We can tell you if we have seen it before and help you get to the bottom of things, including referrals to knowledgeable professionals and other company strategies.

Here is the current state of play:

1. Massachusetts:
We scored a big win but anticipate round two sometime later. Our work prompted revocation of the Directive asserting that Internet vendors have physical presence. On June 9th, ACMA/NetChoice filed a complaint seeking a declaratory judgment in Suffolk County Superior Court, along with a motion for preliminary injunction and a supporting Memorandum. We argued that MA failed to follow its own Administrative Procedures Act; that the Directive violates the Internet Tax Freedom Act (ITFA); and that it violates the Commerce Clause and Due Process requirements of the US Constitution.

Legal arguments were heard on June 27th. The next day, the MA Department of Revenue (DOR) revoked its remote tax rule, and requested the court dismiss our lawsuit. We believe the state wanted to avoid an adverse ruling on the substantive arguments in our complaint.

But on June 29th, the Court issued an order granting a judgment invalidating the Directive. The court agreed with ACMA/NetChoice’s arguments that the state had failed to follow its APA. The Court also stated that the ITFA imposes limits on states, preventing them from enacting taxes that discriminate against the Internet.

The state may issue another rule based on the same rationale. If the state tries again to blatantly violate Supreme Court precedent and the ITFA, we will re-file our lawsuit. We look forward to another winning day in court. Electrons flowing into a computer or smartphone cannot possibly create a “physical presence.”

2. South Dakota:
As you may recall, in April 2016, ACMA/NetChoice filed suit seeking a Declaratory Judgment concerning the clear unconstitutionality of SD’s “economic presence” nexus statute. At the same time, SD sued four remote retailers for failing to register to collect sales tax under the new law. Per a provision of the new law, SD suspended enforcement pending resolution of legal challenges.

In a hearing last December, SD’s Attorney General acknowledged that Supreme Court precedent (Quill v. North Dakota) requires judgment in favor of corporate defendants (it doesn’t get any better than this!).

On March 6, 2017, the SD state 6th Circuit Court granted summary judgment against the state’s 2016 law, ruling in favor of corporate defendants. Because the Defendants lack a physical presence in SD, the Court held that the statute failed as a matter of law under the physical presence standard reaffirmed in Quill. It enjoined SD from imposing sales tax obligations on all retailers that had not volunteered to collect the tax. The court also said that states do not have the right to unilaterally re-write US Supreme Court precedent (but then, if you are reading our stuff, you already knew that!).

Until the legal challenge is finalized, the SD law may not be enforced. The state’s appeal is pending before the SD Supreme Court. This could be the first case in which a state seeks US Supreme Court review. The matter has been fully briefed by the parties and will be placed on the Court’s calendar later this summer.

3. Tennessee
ACMA/NetChoice obtained injunction against economic presence nexus rule (Rule 129). On March 29th, we filed a Complaint/Injunction motion in Chancery Court in Tennessee. The TN-DOR agreed to a consent order for an injunction barring enforcement of the sales/use tax economic presence nexus rule adopted in late 2016 (“Rule 129”). The DOR and AG’s willingness to consent to an injunction is clearly the result of our having obtained a similar injunction barring enforcement of the South Dakota economic nexus statute.

Then on April 11th, the Chancery Court issued an order barring enforcement of the DOR economic presence Rule, “pending a final judgment in this action.”

In May, the TN Legislature adopted an amendment to the State’s budget bill prohibiting the DOR from collecting any sales tax pursuant to Rule 129 pending a decision by a court regarding its constitutionality and approval of the full legislature.

The DOR has served discovery requests on ACMA and NetChoice, to which we have objected.

4. Wyoming
On June 28th, ACMA/NetChoice filed a lawsuit challenging the constitutionality of WY’s economic presence nexus law.

Due to a commitment from the WY AG, we did not file a concurrent motion for preliminary injunction. Per a letter from the state AG’s office, we will “simply allow the statutory injunction to take effect when the Department files its own action next week. That injunction automatically goes into effect and will unquestionably be applicable to all members of ACMA and Netchoice (as well as everyone else).” The AG added that this approach “seems to be the cleanest and simplest way to achieve what your client’s members want to see happen.”

Then shortly after the July 4th holiday, enforcement of the WY economic presence statute was enjoined.

The WY AG filed a declaratory judgment action on July 7th against Systemax, Newegg, Overstock, Wayfair and Fanatics. The AG shared a copy of the complaint with our Counsel George Isaacson and asked whether we would accept service on behalf of the defendants. Brann & Isaacson represent Newegg, Overstock, Wayfair, and Systemax in a similar lawsuit in South Dakota.

The Complaint is based on the WY statute, which, in turn, is modeled after the SD statute. The state has sued the same four original defendants as in the SD case, but added Fanatics, an online marketer of pro sports apparel.

By operation of the underlying statute, enforcement of the law is enjoined during the pendency of the litigation.

5. Indiana
On June 30th, ACMA/NetChoice filed a lawsuit in Marion County Superior Court (Indianapolis) challenging Indiana’s “South Dakota-style” economic presence nexus statute.

We believe the state may act quickly to file suit under the statute. If the State does not file suit at a very early juncture, we will move promptly for judgment in the case, based on our victory in South Dakota invalidating a nearly identical law.

Other State Actions:
We’re here to field questions from members about these cases, and about other states that may merit a legal challenge if funding is provided. These include the following:

Ohio: As part of Ohio’s budget bill signed into law on June 30th was a provision requiring that Internet sellers with more than $500,000 of annual Ohio gross receipts must collect sales tax from Ohio customers. The requirement is triggered if a seller’s website installs cookies on a user’s computer, or if the seller employs a system of servers in Ohio – a/k/a Ohio’s “cookie nexus.”
Minnesota: Enacted a law imposing sales tax obligations on marketplace facilitators. (effective November 1, 2017)
Puerto Rico: Enacted a “tattletale” reporting law with significant penalties. (went into effect July 1st)
Maine: Enacted a remote sales tax law similar to South Dakota. (effective October 1, 2017)
Washington: Is considering a marketplace reporting law for remote sellers.
Rhode Island: Is considering a remote tax and reporting law.
North Carolina: Also is considering a remote tax and reporting law.

Please Act Now
DO take action today to support our work or face a crazy quilt of varying state laws that will make your life a living hell. DO keep us informed of what you are hearing, and what your plans are. DON’T knuckle under or decide to voluntarily comply with what we’ve demonstrated to be illegal requests – voluntarily-complying companies ARE NOT covered under the injunctions we are winning. Help us keep Internet, catalog and remote selling viable and profitable. Thank you.



Hamilton Davison
President & Executive Director
American Catalog Mailers Association

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Lynn Noble is ACMA’s Vice President, Industry Relations, having joined the ACMA in May 2015, following an extensive direct marketing career in private industry as well as the US Postal Service. He is responsible for leading the membership development efforts for the ACMA through new member acquisitions and providing enhanced member value.

Throughout his career, Lynn has held key marketing & sales positions with several leading direct marketers, as well as several high-level management positions with the US Postal Service.

In 2009, at the request of the ACMA, the US Postal Service initiated a new position of Catalog Manager to lead the Service’s efforts to stabilize and grow the catalog industry. Lynn returned to the USPS to lead those efforts and was instrumental to developing a stronger industry partnership between the Postal Service and the catalog industry. Serving as the product manager for catalogs, Lynn helped to raise the awareness of catalog-specific business challenges within the executive ranks of the USPS. During his tenure, the ACMA and catalog companies enjoyed a collaborative and progressive environment that produced more stabilized rates and inclusion in key USPS promotional opportunities.

Just prior to joining the ACMA Lynn was the USPS’s Manager, Strategic Account Operations, leading a team of senior sales professionals who focused exclusively in the Catalog, Mail Order, and E-commerce arena. In addition to his Postal positions, Lynn previously held key positions with leading direct marketing companies, including Cox Target Media, Market Logic, Catalina Marketing,, and Advantage Direct.

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Named Vice President & Deputy Director in January 2010, Miller came to the ACMA following a lengthy career of more than two decades following the catalog/multichannel/e-commerce/retail businesses. Reporting to ACMA president & executive director Hamilton Davison, Miller oversees marketing and communications, membership development, and organizes and oversees ACMA’s National Catalog Forum, while working with Davison on most of ACMA’s postal-related efforts.

Miller started his career as a reporter with Catalog Showroom Business, following a form of retailing that was led by the likes of the Service Merchandise and Best Products retail chains.

After several years of editor/reporter roles with business magazines that followed the toy and gift industries, Miller was named associate editor of Catalog Age magazine (now Multichannel Merchant) in 1986. He rose up the ranks at Catalog Age over the next 18 years to be the magazine’s senior news editor.

Beginning in the late ’80s, Miller became Catalog Age’s postal beat reporter, where he’d follow key postal events and pull out the key catalog mail-related issues for readers. During that time, he attended many Mailers Technical Advisory Committee (MTAC) meetings and National Postal forums.

After leaving Catalog Age in 2004, Miller consulted with several catalogers and multichannel suppliers for a time, he was named news/website editor at Commercial Property News. Less than a year later, he was asked to take the reigns at Catalog Success (now All About ROI) where he served as editor-in- chief from 2006 till the end of 2009.


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ACMA appointed Michael K. Plunkett as its President and Executive Director in January 2024, succeeding founder Hamilton Davison. Mr. Davison moved on to own and run a company. Mr. Plunkett brings years of executive leadership experience having been the President and CEO of the Association for Postal Commerce (PostCom) since 2017.  In the newly-formed dual role, he will continue his current role with PostCom and the two organizations will operate separately.

During his tenure, PostCom has continued to lead the mailing and shipping industry on policy and regulatory matters and to work with Government agency partners to advance issues of importance to members. Mr. Plunkett is also President of the Delivery Technology Advocacy Council, a nonprofit launched in 2020 to concentrate on delivery and logistics technologies.

Prior to PostCom, Mr. Plunkett accumulated more than 25 years Postal experience with the United States Postal Service in numerous executive roles in operations, marketing, product development and pricing.  As a leader within the Postal Service’s management team, Mr. Plunkett developed a well-earned reputation for innovation by leading efforts to develop pricing agreements for domestic services and in the development of the forever stamp and the priority mail flat rate box.

Mr. Plunkett has testified on pricing and policy issues before the Postal Regulatory Commission and Congressional subcommittees.  He has authored and presented papers on postal policies, economics, and operations for National and International conferences.

Mr. Plunkett holds Masters Degrees in Business from the Wharton School at the University of Pennsylvania and the Massachusetts Institute of Technology, where he was a Sloan Fellow. He earned a Bachelor Degrees in Economics and Finance from the Pennsylvania State University.