Last Friday, the Senate voted to include a non-binding amendment to the FY 2014 Budget Resolution that supports the enforcement of state and local use tax laws. Proponents of the Marketplace Fairness Act are attempting to portray this vote as signifying support for legislation that would impose tax collection burdens on small Internet businesses. However, in light of the vague wording of the amendment, as well as the passionate objections made by such opponents as Sen. Max Baucus (R-Mont.), Sen. Orrin Hatch (R-Utah), Sen. Kelly Ayotte (R-N.H.), Sen. Ron Wyden (D-Ore.), Sen. Jeanne Shaheen (D-N.H.), Sen. Jon Tester (D-Mont.) and Sen. Marco Rubio (R-Fla.), it is clear that this issue remains controversial and is by no means settled. An amendment in support of use tax enforcement does not equate to any kind of consensus on HOW that enforcement is to be achieved.
The following statement can be attributed to CCIA President & CEO Ed Black:
“This amendment dealt with ‘allowing States to enforce State and local use tax laws and collect taxes already owed under State law on remote sales.’ It does not deal with the all-important question of HOW to achieve that enforcement and collection. Any issue can appear angelic without the details wherein the devil resides.”
“As Senate Finance Committee Chairman Baucus stated on the Senate floor, the concept of tax enforcement by states beyond their borders is revolutionary. The Marketplace Fairness Act would scrap the fundamental relationship between taxation and physical presence by pressing online retailers into duty as tax collectors. These and other critical issues remain unaddressed, and to equate approval of this amendment to support for the Marketplace Fairness Act is akin to pointing to general approval for budget deficit reduction as evidence of support for specific budget cuts.”
“CCIA will continue to push for much more extensive consideration of this issue through regular order, as such a fundamental rethinking of the way we consider taxes requires a thorough debate on the consequences.”