NTU urges Senators to refrain from considering the controversial “Marketplace Fairness Act” as submitted by Sen. Durbin (D-IL) through an amendment to S. 3254, the Department of Defense Authorization Bill.
Amendment #3223 would have far-reaching, serious consequences that could undermine long-standing constitutional tax policy and hinder economic growth, especially among small businesses. Legislation that has the potential to unleash predatory state tax collectors on already financially strapped citizens nationwide should not be rushed through the Senate and attached to a completely unrelated measure.
The “Marketplace Fairness Act” would be a dangerous expansion of tax collection authority, not a deferential nod to states rights. It would upend the constitutional doctrine of physical presence that protects taxpayers from many kinds of overaggressive revenue administration tactics and would severely undermine a basic tenet of our federal system: tax policy competition among jurisdictions. Furthermore, far from “leveling the playing field” among sellers, this amendment would tilt conditions against small “e-tailers,” who unlike brick-and-mortar stores would be forced to remit sales taxes to thousands of tax jurisdictions. Even sophisticated sales-tax compliance software cannot erase the inconvenience or cost of these liabilities.
If the Senate wishes to wade into this highly controversial matter, it should do so through more hearings next year, where less-disruptive alternatives such as origin-based sourcing may receive the careful deliberation they deserve.
Roll call votes on Amendment #3223 to S. 3254 will be heavily weighted in our annual Rating of Congress.
If you have any questions, please contact NTU Federal Affairs Manager Nan Swift at (703) 683-5700