News, Education and Events Decoding Digital Payments & Fraud

News, Education and Events Decoding Digital Payments & Fraud

Durbin Giveth, Durbin Taketh Away – April 26, 2011

Durbin Giveth, Durbin Taketh Away

April 26, 2011

Sen. Richard Durbin, who spearheaded the debit interchange amendment to the Dodd-Frank Act that bears his name, plans to introduce legislation in the Senate that will not be nearly as well-received by CNP merchants. While some experts have suggested CNP merchants will not benefit significantly from Durbin’s efforts to control interchange rates, retailers—CNP and brick-and-mortar alike—have been nearly unanimous in their support of Durbin’s legislation. Durbin’s newest plan, however, is to target e-commerce merchants that traditionally have not been required to collect sales tax for purchases made by consumers in locations in which the merchant did not have a physical presence. “Why should out-of-state companies that sell their products online have an unfair advantage over Main Street bricks-and-mortar businesses?” Durbin said in a recent speech. “Out-of-state companies that aren’t paying their fair share of taxes are sticking Illinois residents and businesses with the tab.” Merchants, on the other hand, point out that out-of-state retailers don’t reap any of the benefits from another state’s government. There are also practical considerations that make collecting sales tax and undue burden on retailers. “For retailers, sales tax laws are a costly administrative headache,” one publication editorialized. “The ingredients, location and even temperature of an item all affect whether it is subject to sales tax. Now, multiply these regulations by 8,500. That’s the number of local jurisdictions throughout the country with the power to determine their unique tax rate with additional local taxes. No business could keep track of every jurisdiction’s fluctuating rates and regulations.”

  • Share this Article:

Daniel Leibovitch