Great news for taxpayers: Attorneys General (AGs) in Oregon, Montana and Alaska have formed a coalition to oppose the so-called Marketplace Fairness Act (MFA), better known as the Internet sales tax.
This week, AGs Ellen Rosenblum of Oregon, Michael Geraghty of Alaska and Timothy Fox of Montana correctly stated in a letter to Congress: “By authorizing the enforcement of state use tax laws that require remote sales retailers to collect and remit use tax proceeds to out-of-state taxing authorities that the retailer has not established ‘minimum contacts’ with, the [Marketplace Fairness Act] violates the Due Process Clause.”
This important message – that the MFA fails to pass Constitutional muster – is being conveyed to Capitol Hill at a critical time. MFA supporters felt the wind at their backs when the Senate passed the MFA last month. They are now working fervently to carry that momentum over to the House of Representatives.
Thankfully, the bill has not seen action in Congress’ lower chamber. That’s largely because House Judiciary Committee Chairman Bob Goodlatte has tapped the brakes by noting his “significant concerns” with the legislation – though he left the door open to “considering legislation concerning this topic.”
House Speaker John Boehner also expressed concern, but stopped short of outright opposition by stating: "I just think that moving this bill where you have 50 different sales tax codes — it is a mess out there.”
While House passage of the MFA is far from imminent, it’s being aggressively pushed by its proponents: an alliance of big retail companies and state politicians. They have combined to form a well-funded and powerful lobbying force that ignores the burden of MFA on small businesses and consumers.
That’s why this new coalition of Attorneys General could be extremely important. Not only could they influence the thinking of Members of Congress with sound legal arguments, the AGs have the ability to file a lawsuit to overturn MFA in the event it becomes law. Let’s hope it never gets to that point, but if it does, it is refreshing to know that this coalition will be there to fight for the Constitution, taxpayers, and small businesses.