The Marketplace Fairness Act (MFA) “is the single biggest threat to taxpayers that is capable of passing this Congress,” stated NTU President Pete Sepp in a recent “Speaking of Taxpayers” podcast. The MFA would allow state governments to collect sales taxes from every online retailer that sells to consumers in their states, regardless of the state in which the retailer is located. The burden of this legislation would fall on businesses, having to file tax returns for every jurisdiction to which they send products. For more details on the MFA, check out NTU’s Internet Sales Tax Myths and Facts.
In order to inform voters about the consequences of this legislation passing, NTU has joined with the R Street Institute to tour the country on the Internet Sales Tax Road Show.
Below, Andrew Moylan of R Street and Pete talk to an audience in Columbus, Ohio about opposition to the MFA. Ohio voters overwhelmingly reject the idea of other state governments taxing Ohio’s online retailers, 56 percent to 31.
Ohio business owners were greatly concerned about the difficulties of complying with the MFA. An independent study found the cost to businesses of collecting taxes annually for nearly 10,000 existing jurisdictions can range from $57,500 to $260,000. The initial setup, integration, and implementation of the necessary software can cost an additional $80,000 to $290,000.
After the presentation, Pete discussed the hazards of passing the MFA with a local Columbus reporter from WBNS. Many state governments believe the MFA would provide a legal means to pad their coffers by allowing them to collect sales taxes on the online purchases of their constituents. However, with 46 states grabbing at online merchants’ revenues, many small businesses could end up closing shop, unable to afford the cost of compliance.
Look out for NTU and R Street in your state! For additional information and to keep up with the Road Show, head to ntu.org/internet_sales_tax or DontTaxTheInter.net for more in the effort to stop MFA.