This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Taxpayers, Businesses, And Economy Will Suffer Under New Internet Sales Tax Bill, Citizen Group Warns

WASHINGTON, Feb. 14, 2013 /PRNewswire-USNewswire/ -- Valentine's Day couldn't be a worse occasion for Members of Congress to jilt consumers, businesses, and the U.S. Constitution, but they are trying anyway by introducing problematic Internet tax collection legislation – that's the assessment of the 362,000-member National Taxpayers Union (NTU), which announced its continued, strong opposition to the so-called "Marketplace Fairness Act" (MFA). The bills have been introduced in the Senate by Sens. Enzi (R-WY) and Durbin (D-IL) and on the House side by Reps. Womack (R-AR) and Speier (D-CA).

(Logo: http://photos.prnewswire.com/prnh/20101022/NTULOGO)

"The Internet tax collection bill reads like a love letter to overzealous state revenue collectors, not like a piece of legislation designed to address 'tax fairness,'" said NTU Executive Vice President Pete Sepp. "Despite some tweaks to the version introduced in the previous Congress, the latest proposal will also undermine tax competition among the states, tilt the commercial playing field in favor of big-box stores, and upend the constitutionally based doctrine of physical presence that has shielded sellers and buyers from out-of-state tax collectors reaching into their pockets."

NTU has long opposed MFA-style legislation, and today launched a new effort to raise awareness of myths and facts surrounding the issues at stake. Besides the concerns Sepp outlined, he also noted:

  • Sophisticated software won't completely erase compliance costs and burdens associated with nearly 10,000 taxing jurisdictions around the nation; it hasn't done so with the federal income tax system, which NTU estimates as costing individuals and businesses nearly $230 billion in 2012.
  • Internet-based retailers already pay numerous taxes on profits and property, while customers pay taxes associated with shipping. MFA would let states force online sellers to query customers about where they live to remit proper sales taxes – something traditional retailers wouldn't do. The bill's "small seller" exception remains paltry by comparison to other government definitions of a small business.
  • The U.S. Supreme Court's Quill ruling has prevented state tax collectors from aggressively reaching across their borders, but MFA would overturn this important protection against abuse of power. The bill's attempt to carve out a sales-tax only exception to this ruling likely won't survive long. After the precedent to collect one kind of tax this way is established, administrators will likely clamor for the same authority over other taxes.
  • The bill gives states wide latitude to define taxable "nexus," including its controversial extension to online advertising affiliates. Even states choosing not to participate in MFA's framework would have new powers.   

Sepp contended that if Congress wants a constructive role in this tax policy debate, it should consider the grave consequences of MFA as well as examine other options. Origin-based sourcing, for example, would have all retailers – online or brick-and-mortar – remit sales taxes only to the jurisdiction in which they are located. This would have the advantages of preventing extraterritorial taxation as well as preserving tax competition among states and localities.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs