The National Taxpayers Union today cheered the release of a bipartisan framework to help protect taxpayers in the wake of the Supreme Court’s decision in South Dakota v. Wayfair. In its June opinion in the landmark internet sales tax case, the Court upended decades of precedent containing a state’s sales tax powers within its borders..
Andrew Moylan, head of NTU’s Interstate Commerce Initiative, applauded the bill, saying “Chaos is brewing across the country as states have scrambled to seize new tax power for themselves after the Court’s ruling in Wayfair. By solving some of the most vexing questions, like retroactivity, state implementation dates, and obligations for small sellers, Congressman Sensenbrenner’s bill is a great start down the long path of crafting a remote sales tax system that underscores, rather than undermines, important principles of free markets, limited government, and simplicity.”
In order to prevent the chaos of states disrupting interstate commerce with aggressive new tax laws, Rep. Jim Sensenbrenner (R-WI) has joined with Rep. Anna Eshoo (D-CA), Rep. Zoe Lofgren (D-CA), and Rep. Jeff Duncan (R-SC) to introduce the Online Sales Simplicity and Small Business Relief Act of 2018. The bill bans retroactive taxation, delays implementation of hastily-crafted post-Wayfair laws, and establishes a robust small seller exception of $10 million in sales.
This vital legislation can’t pass soon enough. Some states, like Florida, have threatened retroactive taxation. Michigan and North Carolina, among others, have plowed ahead with collection rules despite lacking a statutory basis for them. States like Washington, Pennsylvania, and Colorado seek to impose tax obligations on truly tiny businesses, for whom collecting sales taxes nationwide is a daunting and expensive prospect. Perhaps most egregious, states like Colorado and Louisiana have moved ahead with schemes that are obviously unconstitutional in their scope and reach.
Moylan concluded by saying, “Congress has many priorities to address before the end of the year, but protecting taxpayers from the fallout of the Wayfair decision ought to be among the very highest. Absent Congressional action, billions of dollars in interstate commerce and millions of small businesspeople face the threat of back-tax bills, complicated collection obligations, and nationwide tax and audit responsibilities simply for having the temerity to use the internet to reach buyers. The House should move the Sensenbrenner/Eshoo/Lofgren/Duncan bill as soon as possible.”
Rep. Sensenbrenner just last week received the Taxpayers’ Friend Award for his voting record in 2017, ranking first in the House of Representatives in NTU Rates Congress. NTU and the Interstate Commerce Initiative will be following the developments of this legislation closely, and will be releasing additional analysis of legislative options for Congress.
To speak with Andrew Moylan, director of NTU’s Interstate Commerce Initiative, please contact NTU Vice President of Communications Kevin Glass at 703-683-5700 or kglass@ntu.org.