Yet, proponents of the Internet Sales Tax are claiming new momentum in the House of Representatives for an Internet Sales Tax bill. So what would it take to make an Internet Sales Tax palatable to American voters? This week, House Judiciary Chairman Bob Goodlatte (R-VA) released seven principles to guide his committee in drafting their own version of the so-called Marketplace Fairness Act, which the Senate passed in May on a “lopsided vote.”
The figures produced in the new poll are relatively consistent with a Gallup poll taken in June – people still don’t want it. Politico recalls where the legislation stood in this past spring:
In May, with the support of the White House, 69 senators voted to pass a bill that would force many state-based Internet retailers to charge a sales tax. The House has still not taken the measure up, and some prominent conservative voices have rallied to kill it in committee.
While some members of Congress and a wide array of big special interests were pushing for this terrible tax regime, conservatives fought against it for the good of Americans. In April, we listed 10 awful things about the Internet sales tax – from the harm it would cause small businesses to the higher costs it would cause for consumers, from taxation without representation to the 46 tax audits from hell online businesses would face.
As you dig into that data even further, you quickly notice 18-29 years old are against the IST by a margin of 73-27. Gallup notes in their analysis that “If Republicans in the House oppose the Internet sales tax bill, that may help the GOP’s appeal to younger Americans, a key demographic in the party’s plan to build support before the 2014 and 2016 elections.”
At the press conference on Tuesday, our CEO Mike Needham and Senator Ted Cruz (R-TX) spent time highlighting a generational gap that Heritage Action noted from the Senate approval of the Internet sales tax in May. All seven Republican Senators age 50 and under voted against the Marketplace Fairness Act: Kelly Ayotte (R-NH), 44; Ted Cruz (R-TX), 42; Jeff Flake (R-AZ), 50; Mike Lee (R-UT), 41; Rand Paul (R-KY), 50; Marco Rubio (R-FL), 41; Tim Scott (R-SC), 47.
We have made several arguments against the Internet sales tax. Small businesses would have to comply with America’s 9,646 different taxing jurisdictions and to collect and remit taxes in 46 states. Small businesses like Peace Frogs do not have the administrative resources to comply with these burdensome regulations.
This tax would also undermine the principle of federalism and would grant states the authority to force online retailers (with online sales over $1 million per year) to collect sales taxes for states in which they have no physical presence. Heritage explains:
Abandoning the physical presence standard would be an egregious violation of basic principles of federalism, because it would allow states to expand their power to tax and to regulate beyond their borders.
Jones and other small business owners who depend on the Internet for their success will be harmed by the Internet sales tax. This bill — though it is called the Marketplace Fairness Act — is anything but fair.
EBay and Amazon.com – both internet giants – are split on the issue, with the former in opposition and the latter in support of the tax. They have been weighing in on the debate since before the Senate passed the bill, and continued to make remarks over Memorial Day weekend:
“This legislation … is being called the Marketplace Fairness Act, but I strongly believe it creates an unfair tax burden for small online businesses,” eBay CEO John Donahoe wrote in an email to eBay account holders on Sunday.
So why is this so contentious an issue?
The truth is, it’s really not all that confusing, and if so many people weren’t interested in more taxes and less competition, it wouldn’t be so contentious.
Heritage explains in very clear terms that the Internet tax bill would harm online businesses and consumers. Right off the bat, what must be understood is that brick-and-mortar stores are not at an “unfair” disadvantage. Comparing them to online businesses is like comparing apples and oranges.