Iowa Legislature Should Reject New Taxes in SF 2417 and HF 2489, NetChoice Testifies

WASHINGTON, DC, May 4, 2018 — NetChoice filed testimony this week in the Iowa State House and Senate chambers asking for a full rejection of unconstitutional provisions in SF2417 and HF2489. If enacted, the bills would impose new taxes on Iowans while also harming Iowa’s travel and technology sectors.

“Iowans will likely see this legislation as a tax increase,” said Steve DelBianco, President of NetChoice. “This bill attacks Iowa’s tech sector and travel agents, and its taxes will be passed on to Iowa residents. Legislators should not pass a bill that will come back to haunt them.”

The bills would force out-of-state online marketplaces to collect sales tax from Iowans – a move that breaks with U.S. Supreme Court precedent. It also suffers from questionable timing as the legality of out-of-state tax collection requirements are currently being reviewed again by the U.S. Supreme Court.

A U.S. Supreme Court decision on South Dakota v. Wayfair is expected this summer and will determine if Iowa can tax beyond its borders.  If the U.S. Supreme Court upholds the 60 years of jurisprudence, much of SF2417 and HF2489 will be illegal.

“If this bill is passed, it could be nullified by the U.S. Supreme Court next month in its decision on South Dakota v. Wayfair,” continued DelBianco. “Regardless of the decision, this bill would be a loss for Iowa residents.”

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