Mail-Order Companies Split on Accord

The catalog industry is getting close to reaching a pact that calls for mail-order companies to collect state sales taxes in exchange for simpler rules governing how the companies are taxed. But some mail-order companies said Friday that they would not honor the accord.

The companies said they would not comply with the agreement, which would be voluntary, unless changes are made to make tax laws more favorable to them.

Retailers and catalog companies currently do not collect sales taxes on goods shipped to customers outside states where they operate.

But reports this week of a potential agreement between the states and the catalog industry caused confusion among customers, who thought the tax had already taken effect.

Freeport, Maine-based L.L. Bean issued a statement Thursday saying it has not begun collecting taxes from out-of-state customers and did not intend to.

“The agreement they’ve proposed to date wouldn’t be satisfactory to us,” said spokeswoman Mary Rose MacKinnon.

Lands’ End Inc., based in Dodgeville, Wis., said it also was explaining to customers that its posture had not changed. The company collects sales taxes only from shoppers in the five states where it operates outlet stores--Wisconsin, Illinois, Iowa, Minnesota and New York.

“We’re getting some calls on that,” said Deborah Runde, a Lands’ End spokeswoman. “We’re explaining to them we haven’t made any changes in our sales tax collection.”

Negotiators from 10 states and the catalog industry have been discussing a voluntary agreement in which the companies would collect taxes even in markets where they do not operate retail locations.

In return, mail-order firms would receive from states simpler rules on how they report taxes, an exemption from paying full taxes in states where they have limited presence, and the elimination of past liabilities in some cases.

The two sides could reach a consensus in six to eight months, said H. Robert Wientzen, president of the Direct Marketing Assn. But a group advising the states said a deal could come sooner.

Harley Duncan, executive director of the Federation of Tax Administrators, said the two sides had hoped to unveil an agreement in December. But the catalog industry has indicated that certain issues are not resolved, and more talks will be necessary.

Any pact would have to be approved by lawmakers from states that choose to participate.

J.C. Penney Co., which already collects taxes in every state, said it would welcome the accord because its competitors would face the same costs it has paid for years.

“It would give us a level playing field,” said spokesman Duncan Muir.