America Outdoors Association
America Outdoors Association

April 23, 2013

America Outdoors Association Bulletin

Online Sales Tax Bill Clear Hurdle in the Senate

Flight Delays Caused by FAA Furloughs Generate Congressional Inquiries

Online Sales Tax Bill Clears Hurdle in the Senate

Unless you collect more than $1 million in annual internet sales, you will not be impacted by the Marketplace Fairness Act for the time being.  The small seller exemption will probably save most outfitters who take online reservations or retail over the internet  from the requirement to comply with the sales tax laws in all 50 states. However, governments have a way of expanding these thresholds whenever they need money, so expect the $1 million threshold to come down over time unless there is widespread opposition due to the compliance hassles. The bill appears to require each state to centralize its collection of state and local sales taxes for online sales so online retailers will not have to deal with sales tax rates in over 9,000 jurisdictions, just 50 states or less. Some states may combine their efforts where their rates are similar.  For online retailers the prospect of complying with multiple state audits of their sales tax collection will be mind-boggling. Mega online retailers, such as Amazon.com are supporting the legislation. They happen to sell the software that enable compliance. The bill is also supported by many brick and mortar retailers who complain about unfair competition from online retailers who do not collect state and local sales taxes. 

Flight Delays Caused by FAA Furloughs Generate Congressional Inquiries

The FAA began furloughing 10% of its workforce this week to save $200 million of the $600 million required by a 5% budget cut, sparking Congressional inquiries about their spending priorities. Flight delays began to ripple through the air traffic system shortly after the furloughs began. According to the FAA website: “Yesterday (April 22nd) more than 1,200 delays in the system were attributable to staffing reductions resulting from the furlough. There were more than 1,400 additional delays as a result of weather and other factors.”

A bipartisan group of Senators wrote the FAA questioning the agency’s spending priorities. House Transportation Chairman Bill Shuster questioned why the FAA wasn’t focusing cuts on $500 million in consulting fees and $325 million spent annually on supplies and travel. While travel delays were spoiling travel plans for thousands of travelers, the FAA's parent agency, the Department of Transportation, announced a $474 million grant program to make “communities more livable and sustainable”.

The Washington Post did fact check of some of the accusations that the FAA was playing politics with air traffic controller delays and reserved judgment. Meanwhile, an Op Ed piece in the Wall Street Journal charged the agency with using flight delays as a political strategy. Whatever the cause, it isn’t good for the travel industry to be discouraging flying during the reservation season for summer vacations.

 

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