The Patriot Post® · An Online Sales Tax Fix

House Judiciary Committee chairman Bob Goodlatte (R-VA) knows that the Marketplace Fairness Act, passed by the Senate in the last Congress, is deeply flawed. To sum up: Brick-and-mortar stores don’t like tax-free competition from online retailers, and states don’t like losing out on potential revenue from all those Internet sales. So Democrats (and a few Republicans) want to mandate that retailers collect taxes on online purchases based on the buyer’s jurisdiction. Given that there are nearly 10,000 tax jurisdictions nationwide, that’s a huge burden for small retailers (like our own humble Patriot Post Shop). So Goodlatte proposes a compromise: A tax on sales based on the seller’s home state. While a less bad alternative, James Gattus and Curtis Dubay of the Heritage Foundation explain the plan’s “serious flaws.” They write, “Most problematic is a provision requiring retailers in states which impose no sales taxes to do one of two things: a. collect a minimum sales tax on out-of-state purchases, or b. report information about the sale to the buyer’s home state. In either case, retailers would face a regulatory burden that their own state specifically declined to impose on them. And the explanation given for the new burden – discouraging tax competition – is a weak one. Tax competition – like other forms of competition – often provides benefits to consumers.” Low taxes and Liberty shouldn’t be too difficult to achieve. More…