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Press Release

Congress Must Protect Americans from States’ Online Tax Schemes by Passing Lungren/Lofgren Bill, Citizen Group Says

February 16, 2011
By Douglas Kellogg

(Washington, DC) – America’s online entrepreneurs and their customers deserve protection from a steadily-rising number of predatory tax proposals in states, and federal legislation introduced today by U.S. Representatives Dan Lungren (R-CA) and Zoe Lofgren (D-CA) is up to the job. That’s the assessment of the 362,000-member National Taxpayers Union (NTU), whose Executive Vice President, Pete Sepp, offered the following statement in strong support of the resolution:

     “In all too many states, 2011’s budget season has meant open season on the online retail marketplace. From renewed lobbying efforts to get federal buy-in for a nationwide sales tax cartel, to legislation and lawsuits they hope will give them the ability to tax beyond their borders, revenue-hungry state officials seem willing to try any political ploy or exotic legal theory that could fill their coffers. Practically every day, a new proposal is hatched in some state capital that would hit online businesses with new taxes in order to feed the reckless spending habits of lawmakers.

     For this reason alone, quick enactment of the Lungren/Lofgren resolution, which affirms that Congress will not give states ‘the authority to impose any new burdensome or unfair tax collecting requirements on small online businesses,’ is so imperative. Before states go any further down the road to ruinous taxes – in the process kicking a can-ful of constitutional issues further toward Washington – federal lawmakers should do them a favor by saying ‘enough.’ That’s because state tax hikes targeted toward this sector could, ironically, lead to lower revenues.

     Online businesses and their customers already pay many kinds of taxes – on profits, payrolls, the property where they’re sited, and even for the highways that their shippers use. Imposing huge new record keeping requirements along with heavier tax burdens could lead to job losses as well as reductions in the very business activity that could contribute to state treasuries. Smaller firms would be especially hard-pressed to comply with a maze of tax regulations among 15,000 jurisdictions. At the same time, a key part of the backbone supporting a more robust economic recovery would be weakened.

     Last November’s votes have long been counted, but the American people remain fed up with tired tax hike proposals that harm the economy and fail to address the wasteful spending at the root of so many budget deficits. For their sake, and the community of online entrepreneurs, NTU pledges a strong grassroots effort to help Representatives Lungren and Lofgren win the support they need in Congress for swift passage of their vital bill.”

NTU is a nonpartisan, nonprofit citizen organization founded in 1969 to work for lower taxes, smaller government, and economic freedom at all levels. The group was among the first to support the federal Internet Access Tax Moratorium and oppose the states’ Streamlined Sales and Use Tax Agreement. Note: For more on NTU’s work in this and other public policy areas, visit