U.S. Senate – Today, U.S. Senator Steve Daines led a bipartisan coalition in opposition to ongoing attempts to sneak the Internet sales tax, which would mandate small businesses to collect sales tax on behalf of other cities and states when selling products over the Internet, into the upcoming government funding bill.
“This bill would fundamentally change how online purchases are taxed and would impose yet another burden on Montana’s small businesses,” Daines stated during a press conference held today at the U.S. Capitol. “Under this tax Montana’s small businesses, like Big Sky Gifts out of Kalispell, would be forced to collect sales taxes for up to 9,600 cities and states none of which would go to Montana. The added costs and the burden of more paperwork and more regulations would cost Montana jobs and severely undermine many small businesses in our state.”
The Internet sales tax would allow states to force out-of-state online retailers to collect and remit sales tax to it. The bill could lead to Internet retailers in all states being forced to become tax collectors for nearly 10,000 tax jurisdictions across the country.
Under this tax, online retailers would be vulnerable to audits from thousands of municipalities nationwide – presenting compliance and legal costs that could easily skyrocket as businesses are forced to defend themselves against audits from regulators in faraway places. The Internet sales tax could also become a backdoor channel to impose a sales tax on Montanans.
Statements of Support:
“With only 4 employees, it would be impossible to expect my business to collect tax from 9,600 different taxing jurisdictions across 45 states. The costs of complying with this legislation would not only prevent the possibility of growth and thus more job creation, but it would seriously threaten the status of one or more of my current employees. Large corporations are much more equipped to handle compliance of a national sales tax collection. My business would be on the brink of closing.” – Colleen Rast, Owner of Great Sky Gifts, Kalispell
“Attaching an internet sales tax bill to the upcoming omnibus would be bad policy and even worse politics. The Marketplace Fairness Act or its kissing cousin the Remote Transactions Parity Act would give the federal blessing to aggressive actions by states to expand their tax power in ways that will harm internet-enabled businesses and stifle interstate commerce. That’s why 20 conservative organizations recently announced their opposition to such schemes in a coalition letter to Congress. That’s also why strong majorities of Americans from across the political spectrum also oppose these bills. The internet is vast, powerful, and borderless. We must not let state tax power become similarly vast, powerful, and borderless.” – Andrew Moylan, National Taxpayers Union
“Expanding sales taxes to online purchases may help state and local politicians, but it would result in a de facto tax hike on consumers. The compliance costs alone from an Internet sales tax would put small online retailers at a huge disadvantage against big box stores, and may even put some out of business, which means higher prices and fewer options for Americans who buy things online. It’s a perfect example of ‘taxation without representation’ because it allows politicians to tax sellers who have no physical presence in their city or state, and therefore, no say in the matter. Members of Congress should listen to the people they represent and the small business owners affected, rather than the lobbyists trying to attach this harmful tax to the omnibus bill.” – Jessica Melugin, Competitive Enterprise Institute Associate Director of the Center for Technology & Innovation
“Congress should not unleash state tax collectors to roam the internet in search of tax dollars from companies that have no presence in their states. Especially when it’s a policy backed by the big box companies in order to smother their smaller competitors. This doesn’t level the playing field, it tilts it heavily against the smallest online retailers.” – Hon. Phillip Bond, Executive Director of WE R HERE
“There is never a good time for the implementation of a federally sanctioned internet sales tax regime because it would effectively increase taxes on American consumers by tens of billions of dollars over the next five years. That unpopular policy would stand in stark contrast to the success and popularity of the Tax Cuts and Jobs Act’s individual tax relief.” – Dan Holler, Vice President, Heritage Action
“Including an internet sales tax language that hasn’t gone through committee in a must-pass spending bill is bad process. It’s also bad policy. With more than 12,000 taxing jurisdictions in the United States, the Marketplace Fairness Act or the Remote Transactions Parity Act would add unnecessary complexity for small businesses that operate online. After the passage of a historic tax reform law, making tax compliance more complicated is profoundly misguided. We strongly encourage Congress to wait until the Supreme Court decides the Wayfair case rather than ramming through legislation at the behest of rent-seeking special interests that hurt will hurt small online retailers.” – Jason Pye, Vice President of Legislative Affairs, FreedomWorks
Background:
On Cyber Monday 2015, Daines sent a letter urging Senate Majority Leader Mitch McConnell (R-KY) and House Speaker Paul Ryan (R-WI) to reject any legislation to impose onerous Internet sales tax requirements that would hurt online retailers in Montana and across the nation.
On March 12, 2014, following a House Judiciary Committee hearing on online sales tax proposals, Representative Steve Daines joined WE R HERE Coalition Executive Director Phil Bond to speak out against the Internet sales tax.
On November 30, 2014, Daines published an Op-Ed in the Washington Times opposing the Internet sales tax.
On November 18, 2014, Daines led a rally in opposition to the Internet sales tax alongside Senator Ted Cruz (R-Texas), several House colleagues and representatives from groups opposed to federal online sales tax legislation, such as the Marketplace Fairness Act.
On May 7, 2013, Daines spoke on the floor of the U.S. House of Representatives in opposition to the so-called Marketplace Fairness Act.
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