Inside This Issue - News
Internet sales tax bill gains
May 20th, 2013
WASHINGTON – The National Association of Chain Drug Stores has hailed the Senate for passing legislation establishing Internet sales taxes.
The Marketplace Fairness Act passed the Senate this month in a 69-to-27 vote.
“This legislation would modernize sales tax policy to reflect the marketplace as it exists today,” NACDS president and chief executive officer Steve Anderson said. “When it comes to updating this outdated policy, every day of inaction is another day of discrimination against brick-and-mortar retailers. ”
The bill passed in the Senate would enable states to require retailers with more than $1 million in annual sales to collect state and local sales taxes for online purchases. Currently online retailers must collect sales tax only on products shipped to states where the retailer has a physical presence, including a store or a distribution center. The National Conference of State Legislators estimates that the status quo prevented states from collecting $23 billion in sales tax revenue.
“The law and its interpretation by the courts date back to the pre-Internet era,” Anderson said. “There is no way the Marketplace Fairness Act can be labeled a ‘new tax’ with a straight face,” he said. “It is a long overdue application of existing sales tax laws. The only thing new here is fairness.”
While the bill faces an uphill battle in the House, it has bipartisan support. Also, hundreds of retailers were flying to Washington to rebuff the arguments of small-government groups, including Grover Norquist’s Americans for Tax Reform, which has tremendous sway in the House.
“After 20 years, there is finally light at the end of the tunnel for our brick-and-mortar businesses,” said Rep. Steve Womack, (R., Ark.), the bill’s House sponsor, whose district includes Walmart’s headquarters. “Saving local retail business depends on it. Now it’s up to the House to act.”
Opponents say they will try to slow House action and raise the concern that the complexity of tax collection will kill many Internet retailers or blindside them with audits.
In a “Memo for the Movement,” a coalition of 52 conservatives demanded that House majority leaders not bring the Senate legislation straight to the House floor. They said House conservatives “should reject any bill that expands the authority of out-of-state governments to regulate businesses with regard to online taxation.”
Signers included Norquist, who fashioned the no-new-taxes pledge that almost every Republican in Washington has signed, conservative leaders Phyllis Schlafly and Richard Viguerie, and the heads of Heritage Action, the Heritage Foundation’s political arm, the Tea Party Patriots, Americans for Prosperity and FreedomWorks.
Still, the House bill has 65 cosponsors, almost half of them Republican, including such long-standing conservatives as Joe Barton of Texas and Spencer Bachus of Alabama. Advocates of the legislation point to conservative supporters including American Conservative Union chairman Al Cardenas and economist Arthur Laffer.