But expanding the sales tax to technology platforms, and making that tweak retroactive, was a large change that would have violated the Internet Tax Freedom Act, a federal law barring multiple or discriminatory taxes on e-commerce, Steve DelBianco, president and CEO of NetChoice, an e-commerce trade association, said. “The legislators read the headlines and understood the dangers of imposing a retroactive sales tax on businesses around the country,” he said.
Steve DelBianco, president and CEO of NetChoice, an e-commerce trade association, said the Senate proposal would almost certainly bring lawsuits from internet platforms, as well as possible congressional scrutiny over the issue of retroactivity. States have generally steered clear from retroactivity following the U.S. Supreme Court’s South Dakota v. Wayfairdecision, which dozens of states have used as the foundation to expand sales tax on out-of-state retailers—a move Ohio is also considering in the Senate budget bill.
“A group representing some of the country’s biggest e-commerce companies, including eBay and Overstock.com, has sued the state in an effort to block a plan that requires online retailers to collect sales tax. The state’s new policy will take effect July 1, unless a judge grants NetChoice’s request for an injunction…..”
Despite the histrionics of high-tax enthusiasts, new tax cuts are producing incredible revenue for state tax coffers. Texas alone has seen a 15 percent tax revenue increase this year. And Texas Comptroller Hegar expects an 8 percent growth in the state’s tax collections over the next two years — an extra $9 billion more to the state.
NetChoice, a national trade association of eCommerce businesses that promotes convenience, choice and commerce online, opposes H.B. 2702 in its present form. According to a NetChoice analysis, H.B. 2702 would discriminate against interstate commerce by requiring out-of-state business to pay the Transaction Privilege Tax (sales tax) of the location where Arizona purchasers reside, while in-state businesses could simply use the rates and rules applying to the physical business location regardless of where customers reside.