The Marketplace Fairness Act also known as the “web-sales tax
bill” will end tax-free online shopping and is expected to be passed in the
Senate today.
This bill is a tax increase and will burden small online businesses with difficult tax-collection
responsibilities. Contrary to popular belief, a state does not have a right to collect sales taxes from a business not within said state. See the 1992 Quill
v. North Dakota SCOTUS decision and Article 1 Section 9 of the U.S. Constitution
(“No Tax or Duty shall be laid
on Articles exported from any
State.”). Therefore, states
are not attempting to collect sales taxes that they are already owed since they
do not have a Constitutional right to this money in the first place.
Rep. Steve Womack (R., Ark.), the
chief House supporter of the bill says “There's a lot of political difficulty
getting through the fog of it looking like a tax
increase." Well, consider this
Congressman Womack, if it looks like a duck, swims like
a duck, and quacks like a duck, then it probably is a duck.
The bill would
enable states to require out-of-state
merchants to collect sales tax on goods purchased online by their residents. This
bill will ignore the 1992 Supreme Court decision that states don't have the power to tax unless the
retailer has a physical presence,
such as a store or warehouse, in that state.
Brick-and-mortar stores are not being hurt and the current law is completely
fair. Brick-and-mortar
stores should collect sales tax to pay for fire, police, and
other services. However, if the
business has no physical presence in a given state, then there is no reason to
collect sales tax for that state. Online
businesses that are neither served, nor
represented, by out-of-state governments, should not bear the cost of their
revenue collection. The sales tax should be based on the location of the online
retailer not the buyer. When a person from NY visits Disney World in
FL, is Disney World required to find the buyers exact home address and remit
the sales tax to NY? NO.
So, why would it be fairer to require online retailers to remit taxes to
a state they do not have a physical presence?
Also, what is to stop buyers from buying from international sellers to
avoid this archaic proposed sales tax system? Constituents will know this is a tax
increase and if House Republicans pass this bill there will be a
grass-roots voter backlash. By not
passing the Marketplace Fairness Act the House Republicans will show their base
that they really do not want to raise taxes.
As part of a compromise, the voters were burned when the Bush tax cuts
expired. I say no taxation without representation!
Rep. Paul
Ryan (R., Wis.) told a
crowd of constituents in Racine, Wisconsin “I'd like to think there's a way to
address this inequity without giving the government
power to expand taxing authority beyond that intent," he said.
Rep. Mo Brooks (R., Ala.) said he is
undecided, and is hearing from constituents on both sides of the debate. While
he was in Huntsville, Ala., recently, constituent Matthew Sorrell went to the
legislator's local office and urged him to vote against the bill. As the
co-founder of Infinity College Bookstore, an online retailer that buys and
resells college textbooks, "I might have to go through all the
transactions that we've had every month and figure out based on the ZIP Code
that the book was shipped to what jurisdiction they're in and then remit the
tax to each one," Mr. Sorrell said.
Marty Abroms, of Florence, Ala., an accountant whose clients include the
store chain Books-a-Million, wants Mr. Brooks to support the legislation.
"The only way they're going to save our brick-and-mortar retailers is to
get this bill passed," he said in an interview. Mr. Abroms should consider becoming an
accountant for companies that are not brick-and-mortar book stores. With the advent of nook books and the fact
that brick-and-mortar book stores never have the book I want in stock… Mr.
Abroms needs to accept that times have changed for the better and we’re never
going back. Welcome to the 21st century.
Pushing for the legislation are
traditional retailers, small and large, including Wal-Mart Stores Inc., which has its headquarters in Mr.
Womack's district; Amazon.com Inc., the online
retailer that is expanding its physical presence across the country; and state
and local officials from both parties.
More than 100 entities have disclosed they
are lobbying specifically on the Internet sales-tax legislation. Amazon has
hired two high-profile former senators, Democrat John Breaux and Republican Trent
Lott, to represent it specifically on the sales-tax issue.
Amazon paid the two former senators and their firm, Patton Boggs LLP, $220,000 in the first quarter of 2013,
according to public disclosure records.
The Retail Industry Leaders Association, a
trade group, hired former Mississippi Gov. Haley Barbour, a Republican, to
lobby in favor of the legislation. The group has paid his firm more than $250,000 since the beginning of
2012.
Opponents include the conservative Heritage
Foundation; activist Grover Norquist; lawmakers from states with no sales tax;
and NetChoice, a coalition of online businesses that includes News Corp NWSA ., publisher of
The Wall Street Journal. EBay Inc. says it would like to see the threshold for
exempting sellers raised to $10 million from the Senate bill's $1 million
level.
