Today, a number of tech and taxpayer advocacy groups announced their opposition to an Internet sales tax amendment that is being offered by Senators Mike Enzi (R-WY) and Dick Durbin (D-IL) during the debate on the Senate Budget Resolution.
Like eBay, these groups believe that any proposal that has the ability to impact millions of businesses and consumers nationwide should not be tacked on to a federal budget resolution, but it should be debated and discussed in an open and transparent manner. When our country is reeling from an economic recession, now is not the time to create a new sales tax regime that greatly expands state tax authority to impose tax burdens on businesses with no connection or presence in that state.
Below is a sampling of some of the statements made by these organizations:
Computer & Communications Industry Association (CCIA) President and CEO Ed Black:
“The debate over Internet sales tax collection is nothing less than a fundamental rethinking of the way we consider taxes. Severing the relationship between taxation and physical presence would be a significant step with profound impacts on electronic commerce and on the future shape of commerce itself. Such a consequential and complex issue deserves much more extensive consideration through the full legislative process. Thrusting the Internet sales tax issue into the midst of the budget resolution process does a disservice to both.”
Americans for Tax Reform (ATR) President Grover Norquist:
“While achieving “fairness” may be a laudable goal, it cannot be an excuse for increasing the burden on taxpayers. We believe that there are a number of problems with the Marketplace Fairness Act – most importantly, the bill would force customers to pay more in taxes…This legislation encourages states to collect taxes across their borders from businesses with no recourse. Thus states will compete for revenue by increasing cross-border taxes, rather than lowering taxes. An incentive to raise taxes can never prove beneficial. Be wary of any Sense of the Senate votes regarding remotes sales tax collection. While the language may appear benign, it is an attempt to show that senators favor remote taxation as delineated in the Marketplace Fairness Act.”
Information Technology Industry Council (ITI) Director of Government Relations Andy Halataei:
“Every time we see encouraging economic news, some members of Congress come along with proposals that would increase the burden on small businesses. This new online sales tax is another example of Congress being out of step with the rest of the country,” explained ITI Director of Government Relations Andy Halataei. “It makes zero sense to add taxes to small businesses at a time when the country is just beginning to get its economic momentum headed in the right direction.”
Competitive Enterprise Institute (CEI) Adjunct Analyst Jessica Melugin:
“This legislation will mean more burdensome complexity, more loopholes and higher tax rates. If this is what Congress thinks state tax law needs, let's hope it doesn't get around to working on the federal tax code anytime soon.”
NetChoice Executive Director Steve DelBianco:
"Levying a new tax on Internet sales deserves an honest conversation about the real impact on businesses across the country. It seems that every day more folks are sounding the alarm over the added complexity, costs and inequality that the Marketplace Fairness Act will impose. Including a vote on any Internet sales tax provision as part of the federal budget process confuses the issue and disguises the motives of Internet tax advocates."
R Street Outreach Director and Senior Fellow Andrew Moylan:
“First, a brief reminder of why this bill is misguided. It would allow states to tax businesses beyond their borders for sales made online, setting a terrible precedent for other areas of tax policy and subjecting businesses to huge compliance burdens. It also imposes an “unlevel” playing field by allowing brick-and-mortar sales to collect tax based on the business’ location while forcing online sales to collect tax based on their customer’s location (a much more burdensome and complicated standard). Third, it creates real interstate commerce burdens of the kind that Congress should be actively avoiding.”