Dear Representative Sensenbrenner:
On behalf of the 362,000-member National Taxpayers Union (NTU), I write to express our support for H.R. 5252, the “Tax and Fee Collection Fairness Act of 2014.” This legislation would require that a transactional nexus 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 transactional nexus to exist before taxes can be collected, H.R. 5252 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. H.R. 5252 would help to properly delineate the appropriate boundaries between interstate and intrastate transactions by requiring that an actual financial exchange – or transactional nexus – 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 H.R. 5252, the “Tax and Fee Collection Fairness Act of 2014” and urges all Representatives to work toward its swift enactment.
Sincerely,
Brandon ArnoldExecutive Vice President