5 Things to Remember about the Internet Sales Tax

Feb 27, 2014

Remember when we told you 10 awful things about the Internet Sales Tax? It's a good time to think about the issue again.

Last year, some lawmakers were pushing for the so-called Marketplace Fairness Act. It anything but fair, and though the issue died down in 2013, it's trying to rear its ugly head again this year.

On March 4, the House Judiciary Committee will hold a hearing to explore alternative solutions to the Internet sales tax issue.

If our wallets weren't inanimate objects, they'd be running for cover! If you're with most Americans, you probably don't like the Internet sales tax, either.

Here are 5 things to remember about the IST, and if the debate continues to heat up, you may want to remind your representative in Congress how you feel about this tax.

1. Shrinking Entrepreneurs. Why are pro-IST politicians so willing to harm American entrepreneurs? Entrepreneurs fear the potential for out-of-state tax audits if the Marketplace Fairness Act becomes law. Small businesses would face enormous compliance burdens if they're subjected to 9,646 different tax jurisdictions.

2. Audits Abound. If a bill like the Marketplace Fairness Act becomes law, online businesses could face the threat of 46 out-of-state audits. That's a hellish prospect!

3. Higher Costs, Less Choice. An Internet sales tax may force online businesses to raise their prices, which in turn could result in higher prices for consumers and less choice for consumers.

4. More Money for Big Government. The bottom line about the IST is it means more money for state governments and big government in general, and less money in the pockets of people who shop online, on the phone, or by catalog. In Alabama, for example, proponents of the IST want to use the taxes collected for "state employee pay raises," and as a way to help "fix the state's budget woes."

5. Taxation without Representation. Heritage Foundation President Jim DeMint put this one best: "Retailers would be forced to act as tax collectors for states in which they have no voice."