Measure Likely To Face Strong Opposition Due To Controversy Surrounding Online Sales Tax Collection
As e-commerce continues to soar in popularity, debate has been growing over whether or not local, state, or Federal governments should tax consumers’ online purchases. In the latest move on the debate, Rep. Jim Sensenbrenner (R-WI) introduced the No Regulation Without Representation Act of 2016. The measure would bar “states from regulating beyond their borders by imposing sales tax collection requirements on individuals with no physical presence in the taxing state and no vote in the representation that would implement the tax,” the Congressman said. He added, “States should not have the ability to tax non-citizens, plain and simple. This legislation would help reduce burdensome overregulation, keep government overreaches in check, and ensure that only residents of a state are subjected to tax obligations.” Politico reports that this measure would codify the Quill standard, “named for the 1992 Supreme Court case that ratified the standard.” Sensenbrenner’s measure comes during a time when other GOP members of Congress, including Rep. Jason Chaffetz (R-UT), “have been pushing legislation that could force merchants selling online to collect in states where they don’t have bricks and mortars.” Among those opposed to Sensenbrenner’s approach is the Marketplace Fairness Coalition, which argues, “This legislation does not solve the persistent market distortion that is causing economic harm to both Main Street merchants and states across America but rather prolongs it by proposing an obsolete pre-Internet standard that is out of step with today’s marketplace.”
What This Means For Small Businesses
Implementing a Federal online sales tax measure has been tricky, in part, due to the controversial nature of the topic. In just one recent example, the New Orleans Times-Picayune reported that three Republican candidates for Louisiana’s Senate seat, Reps. Charles Boustany (R-LA) and John Fleming (R-LA) and Louisiana Treasurer John Kennedy, have all publicly voiced opposition to such regulation. During a candidate forum sponsored in part by the Louisiana chapter of the NFIB, Kennedy said, “Here’s what I think the United States Congress should do with the Internet: Leave it alone.” Small businesses would be inclined to agree that Federal oversight on this issue is unnecessary, and would only add another layer of red tape to an already overburdened business community.
Additional Reading
Governing previously examined the status of Internet sales tax measures in various states across the US.
Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.
