Internet sales tax to be discussed in committee

by Chuck February 27, 2014

Internet sales tax

Internet sales tax

The Marketplace Fairness Act (MFA) will inch ever so slightly closer to debate in the House when a special committee holds its upcoming hearing on Internet sales tax issues.

Representative Jason Chaffetz (R-Utah)

Representative Jason Chaffetz (R-Utah)

“Exploring Alternative Solutions on the Internet Sales Tax Issue” is scheduled for the House Judiciary Committee at 10:30 a.m. on March 4, 2014. Jason Chaffetz, a republican representative of Utah, will explore the concepts laid out by House Judiciary Committee Chairman Bob Goodlatte (R-Va.) last September. Chaffetz’s goal for this hearing is to examine Goodlatte’s guidelines and look at ways to refine the MFA legislation’s wording (H.R. 684 and S. 743) to address opponents’ concerns and not to make any changes to the current bill at this time.

Goodlatte outlined seven basic principles that need to be attended to before interstate sales tax becomes practical:

1)      Online retailers should not face new or discriminatory taxes that brick and mortar retailers or not faced with.

2)      The burden of sales tax compliance should be equal – not easier nor more difficult – for online retailers versus brick and mortar retailers.

3)      Out of state retailers should have equal access to protest unfair or discriminatory regulations.

4)      State governments should simplify tax laws so as not to shift an onerous burden onto businesses and make compliance inexpensive and reliable, even for small businesses.

5)      States should keep sales taxes low and compete with one another so as not to disadvantage American retailers to foreign competition.

6)      States should be sovereign and not be subject to federal compliance burdens.

7)      Customer data must be private and protected.

Various factions, both pro and con on the MFA, have responded positively to Goodlatte’s principles.

The MFA seems unlikely to be brought before the House prior to this year’s midterm elections but may gain traction in the next congress if arguments against the legislation can be addressed.

Read more at Bloomberg BNA

Charles F. Spielmann

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