Dear Senator Manchin:
On behalf of the members of National Taxpayers Union, I write to express our support for S. 1261, the “Wireless Telecommunications Tax and Fee Collection Fairness Act of 2015.” This legislation would require that a financial transaction exist between a buyer and seller in order for a state government to compel the seller to collect taxes.
Your legislation would benefit consumers and businesses alike by providing much-needed clarity to the tax treatment of certain purchases. By requiring a financial transaction to exist before taxes can be collected, S. 1261 would effectively end the arbitrary and unfair attempts of some state governments to collect taxes from businesses that were not directly involved in a commercial transaction.
The bill would also help ensure that interstate commerce is not impeded by overzealous tax collection efforts. While state governments have the authority to assess and collect taxes on activities that occur within their borders, the Constitution gives the United States Congress the sole authority to regulate interstate commerce. S. 1261 would help to properly delineate the appropriate boundaries between interstate and intrastate transactions by requiring that an actual financial exchange – or financial transaction– occur between a buyer and seller as a prerequisite for tax collection.
Given the fact that many state governments face budgetary shortfalls, it’s no surprise that some are pursuing more aggressive methods to bring in tax revenue. It is therefore especially important to ensure that appropriate rules are in place to protect consumers and businesses from improper tax collection practices. To our members, how a tax is administered can matter as much as how a tax is structured.
NTU is pleased to endorse S. 1261, the “Wireless Telecommunications Tax and Fee Collection Fairness Act of 2015” and urges all Senators to work toward its swift enactment.
Sincerely,
Brandon Arnold
Executive Vice President