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Press Release


New Internet Sales-Tax Bill Will Lead to Same Old Woes for Consumers, Businesses, Taxpayer Group Contends

October 12, 2011
By Douglas Kellogg
By Pete Sepp

For Immediate Release:

(Washington, DC) – Federal legislation introduced today that would overturn constitutional precedent and allow states to force businesses beyond their borders to remit taxes has many of the same problems plaguing other bills giving the federal government’s blessing to “remote sales” tax schemes. That’s the conclusion of the 362,000-member National Taxpayers Union (NTU), which has announced its opposition to the latest bill, introduced by Representatives Jackie Speier (D-CA) and Steve Womack (R-AR). NTU Executive Vice President Pete Sepp offered the following comments on the proposal:

“Not content with avoiding the mistake of their House and Senate colleagues who backed the Main Street Fairness Act, some Members of Congress are bent on moving new legislation of their own that would give the green light to trample on taxpayers and the businesses that serve them. But whatever the title of this latest bill is, forget about ‘fairness’ on Main Street; the proposal simply takes another pothole-filled path to an unwelcome economic destination.

Though the House plan introduced today does not explicitly authorize the Streamlined Sales and Use Tax cartel, as the tragically misnamed Main Street Fairness Act does, the two pieces of legislation are based on similarly flawed concepts. Both play upon the assumption that e-commerce is some vast ‘untaxed’ enterprise, when in fact sales taxes are already collected on intrastate as well as ‘click-and-mortar’ transactions. Both fail to sufficiently appreciate the profit, payroll, fuel, and other taxes that online businesses and their customers already ‘contribute’ to federal and state coffers. Both pay only limited attention to the disproportionate compliance costs that struggling smaller businesses would face from new sales tax collection edicts. Both gloss over the primary causes of states’ fiscal woes: a slow economy (which certainly won’t be helped through higher taxes) and a failure to keep budgets under control. Both fall short of recognizing the importance of the Internet to the survival of small businesses, for expanding their customer bases and for managing their own expenses. If this is Congress’s idea of ‘helping Mom and Pop’ establishments, I’d hate to see what hurting them looks like.

Elected officials should be concentrating on policies that will make America an economic powerhouse, rather than consign us to the poorhouse. That effort could start with passage of bipartisan legislation like H. Res. 95, which affirms that Congress won’t give states ‘the authority to impose any new burdensome or unfair tax collecting requirements on small online businesses.’ Doing so would provide one of many protection measures necessary to give job creators the confidence they need to lead a long-overdue recovery.”

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 www.ntu.org.