The Internet empowers entrepreneurs to find consumers across the country and throughout the world, particularly empowering small and medium-sized businesses.

However, as local, state and the federal government look for ways to close budget gaps and raise revenue, some are seizing on the opportunity to target online sales.  Congress is now debating legislation that would require out-of-state retailers to collect sales and use taxes on purchases made to residents of their states — regardless of physical presence.

CCIA’s View:

CCIA has long opposed such legislation as burdening online vendors with the task of sorting through the policies of thousands of taxing authorities around the country, and serving as revenue collection agencies for each of them.  As innovation and entrepreneurship have always been the drivers of our economic growth, it is counterproductive to add to the administrative burdens of small businesses at the very moment we need them growing and leading our economic recovery.

There will be negative implications on the Internet if the relationship between taxes and physical presence is broken.  E-commerce has enabled businesses to broaden their scope beyond traditional geographical limitations.  Allowing states to impose geographically-based taxation collection requirements on e-commerce businesses would re-impose the very limitations that innovation has enabled them to overcome.  Indeed, since the broader the customer base, the more tax jurisdictions the business would have to collect for, so businesses would be in fact penalized for their success.  Good tax policy should promote and support new innovative business models rather than simply protect the old.

Most Recent Statements&Findings:

House Judiciary Committee to Examine Internet Sales Tax Alternatives

Washington — The House Judiciary Committee will hold a hearing Wednesday on “Exploring Alternative Solutions on the Internet Sales Tax Issue.”  The Computer & Communications Industry Association will be following this hearing with great interest, in the hopes that it will begin the substantive and in-depth discussion on Internet sales tax collection that unfortunately was…

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House Judiciary Committee Releases Internet Taxation Principles

Washington – The Computer & Communications Industry Association (CCIA) today welcomed the release of the House Judiciary Committee’s basic principles on Internet sales taxation. Chairman Bob Goodlatte’s, R-Va., seven principles addressed issues like the need for tech neutrality and simplicity. These are issues CCIA had raised in opposing the Senate’s Marketplace Fairness Act (MFA).  We hope these…

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Make Internet Tax Moratorium Permanent

Yesterday, a bipartisan group of House members introduced H.R. 3086, the Permanent Internet Tax Freedom Act.  The bill would make permanent the moratorium on new state and local Internet access taxes and on multiple or discriminatory taxation of e-commerce.  Rep. Bob Goodlatte (R-VA), Rep. Anna Eshoo (D-CA), Rep. Spencer Bachus (R-AL), Rep. Steve Cohen (D-TN) and…

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Problems with Marketplace Fairness Act Still Need to be Addressed

Last Friday, during the Vote-O-Rama on the Senate’s FY 2014 Budget Resolution, the Senate voted to approve an amendment offered by Sen. Dick Durbin (D-Ill.) regarding the online sales tax issue. Sen. Durbin announced “75 U.S. Senators showed their support for the Marketplace Fairness Act of 2013,” and characterized the amendment as “an amendment summarizing the bill.” Many…

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