The Patriot Post® · Movement on the Internet Sales Tax

House Judiciary Committee Chairman Bob Goodlatte (R-VA) is expected to issue a proposal for Internet sales tax legislation in the coming days. The Senate bill, known as the Marketplace Fairness Act (MFA), passed by a vote of 69-27 and gives states the power to collect taxes on online sales from out-of-state businesses. Currently, states can only collect taxes from businesses that have a physical presence in their state. Consumers are supposed to report Internet purchases on their taxes, but they seldom do. The move to tax Internet sales grew out of the government’s desire for a fresh revenue stream to help fund its insatiable spending appetite and an intense lobbying push by brick-and-mortar retailers arguing that the current tax model gives Internet-only retailers an unfair advantage.

There are numerous reasons not to like the Senate bill. It expands the taxing power of the federal government, gives states unprecedented taxing power over residents and businesses of other states, and creates an unequal burden among retailers, despite what the pro-MFA lobby claims. Goodlatte may be trying to get out ahead of the debate by offering a less harsh alternative to the Senate version, recognizing that it may only be a matter of time before Internet taxation becomes a reality.

Any attempt to craft a bill in the House faces an uphill climb. Many Republicans are, thankfully, resolutely opposed, and a majority of the public is as well. The National Taxpayers Union and the R Street Institute conducted a survey that found 57 percent of likely voters across the political spectrum oppose an Internet tax. Pro-MFA lobbyists disregarded that poll’s findings, but a Gallup survey in June reached nearly identical results.