As the song says about New York, “If I can make it there, I’ll make it anywhere.” But if the state budget includes a new sales tax mandate, online marketplaces may not make it in New York – or anywhere else, for that matter.
Online marketplaces such as Amazon and eBay enable small producers and specialty retailers to reach customers across the country who might never visit their factories or stores. From handmade crafts to custom clothing to specialty tools, online marketplaces are empowering small businesses and meeting consumer demand.
As you break out your credit cards this holiday season, you might not know how close we came to a law that would have put Internet retailers and their customers at a permanent disadvantage. Luckily, two Congressional leaders protected us from a radical new tax regime for online purchases.
Prior to the November elections, supporters of the so-called Marketplace Fairness Act (MFA) declared their intent to leverage the unique pressures and chaos of the lame duck session to ram through their increasingly unpopular Internet tax bill.
The Wall Street Journal editorial page has a great article about tax advocates’ last minute push to pass their online sales tax legislation (MFA). We’ve talked about MFA’s problems before. The WSJ editorial warns about the taxpayer funded National Conference of State Legislatures’s plot to storm the hill this Wednesday to demand higher tax burdens.
Sometimes doing the right thing in Washington means calling your allies out when they’re in the wrong. It’s a brave move for any lawmaker, and one we don’t see often enough in the halls of the Capitol.
That’s why its important to acknowledge Senator Ted Cruz’s brave decision to speak out against shadowy backroom dealings between Democrats and Republicans. This shadow plan would sneak into law Sen. Reid’s new internet tax burden, the Marketplace Fairness Act, before the new Republican Senate arrives in January.
As a general rule, the less you hear about a particular political strategy, the more you should worry about it. So it’s telling that an effort by the Senate to impose a radical new Internet sales tax regime during this year’s lame-duck session is being planned in secluded Capitol hallways, far from public scrutiny.
We wonder what good, if any, will come from Senate Majority Leader Harry Reid’s, D-Nev., intention to attach the ironically-named Marketplace Fairness Act — a bill that requires online retailers and catalogs to collect and remit sales taxes to nearly 10,000 U.S. tax jurisdictions — to the Internet Tax Freedom Act — a bill that would prevent new taxes on Internet access charges.
Today, NetChoice member Overstock penned an op-ed in Roll Call laying out the fundamental flaws with the Senate’s Marketplace Fairness Act (MFA). In his Roll Call post, Overstock Chairman Jonathan Johnson reiterated his call that any federal bill must include a complete preemption of state law — the federal solution is the only way to allow state tax collectors to reach beyond their borders. Of course the Senate’s bill does nothing to preempt states.
But lack of state preemption isn’t the only problem Johnson cited with MFA. Read more
On behalf of the undersigned, we encourage you to pass a clean permanent extension of the Internet Tax Moratorium, and commend the House of Representatives on passage of H.R. 3086, the Permanent Internet Tax Freedom Act (PITFA).
Senators John Thune (R-S.D.) and Ron Wyden (D-Ore.) have introduced S. 1432, the Internet Tax Freedom Forever Act (ITFFA), which mirrors the House language. Both ITFFA and PITFA reauthorize and make permanent legislation that has been U.S. national policy since 1998. The clean Internet access tax moratorium overwhelmingly passed the House, and similarly a clean ITFFA will easily pass the Senate, and again protect unfettered access to Internet connections. Read more
When we meet twice a year to put together the Internet Advocates’ Watchlist for Ugly Laws (iAWFUL), we’re looking at two key factors: the relative awfulness of the bill or law and it’s likelihood of taking effect. It’s rare that one measure tops both categories, but for the August 2014 list, the choosing the worst of the worst was morbidly simple.
The ironically titled Marketplace Fairness Act (MFA) has been a fixture on the iAWFUL since we first introduced the list – thanks to the unique burdens it seeks to impose on Internet sellers and customers. But as bad as MFA is, the awfulness of the bill has always been tempered by our confidence that right-thinking lawmakers wouldn’t allow it to pass in its current, fatally flawed form. Read more
Last week, the National Bureau of Economic Research released a report that identifies the real winners of a new online sales tax regime. To the surprise of no one, the study found that small businesses struggling on MainStreet should not expect the taxman to be their savior.
Everyone likes and roots for small entrepreneurs. We know the people in our community who run local retail and we respect what they do. Their efforts are felt and admired on a daily basis. That is why the generic idea of supporting Main Street is so powerful.
But, in the case of online taxation, we now have proof that Main Street won’t see a boost in sales if the Marketplace Fairness Act (MFA) is passed. Read more