Alabama: Don’t Dis’ the U.S. Constitution as You Dig for More Tax Revenue

Screen-captureWe recognize that now is a period of economic discomfort for the states, where lawmakers are searching for new sources of tax revenue.  However, the pursuit of tax revenue is no excuse for legislation that disregards the very document on which this nation is founded.

This latest dis’ of the US Constitution comes in the form of Alabama’s tax reporting bill, HB 365.

Article I of the US Constitution declares that states can’t pass laws that favor their own businesses over other states’.  So Alabama, for example, couldn’t pass a law stating, “Oranges grown in Florida will cost $2 more than oranges grown in Alabama.”  This Constitutional prohibition makes sense, since all US citizens benefit from a single economic system.

But unconstitutional in-state favoritism is what Alabama HB 365 is all about.  If passed, HB 365 would impose requirements only on out-of-state businesses, giving in-state businesses a commercial advantage.

HB 365 requires only out-of-state online businesses to:

  • force Internet users to view and affirmatively consent to pop-up notifications before they make a purchase; and
  • send all Alabama buyers an annual letter detailing their purchases.

No in-state businesses needs to obtain such consent from users, and no in-state businesses needs to send buyers a purchase reporting letter.

These times are tough.  But we can’t abandon the principles that support the US economic system.

HB 365 disses small businesses, too.  The bill feigns recognition of the disproportionate impact that compliance burdens have on small businesses, by exempting those with less than $10,000 in annual sales.   But this threshold would still capture small businesses selling as little as $28 dollars a day.

This article of the Constitution exists for a reason: to ensure that commerce flows freely among the states. HB 365 flies in the face of such commonsense principles created for the common good.

These times are tough.  But we can’t abandon the principles that support the US economic system. And Alabama can’t just dis’ the Constitution in the pursuit of tax dollars.

1 reply
  1. Eric Goldman
    Eric Goldman says:

    I wonder if the Alabama legislature has considered Direct Marketing Association v. Huber, No. 10-cv-01546-REB-CBS (D. Colo. Jan. 26, 2011), striking down a similar law from Colorado. Eric.

    Reply

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