The Ugly Facts About the Internet Sales Tax

by Amy Payne, Heritage Foundation: The Internet sales tax passed the Senate, but a growing chorus is pointing out that it would hurt many to help the tax man.

The Senate passed the misleadingly named Marketplace Fairness Act last week by a vote of 69-27. But House Speaker John Boehner (R-OH) said that he is unlikely to support it—and other House Members said they want to take a thorough look at it through the normal committee process.

“Moving this bill where you’ve got 50 different sales tax codes, it’s a mess out there,” Boehner said. “You’re going to make it much more difficult for online retailers to be able to comply.”

See our INFOGRAPHIC on what small businesses are saying

Not only would it charge a new sales tax to many consumers shopping online, but it fails to do what its proponents say—achieve “fairness” for stores.

As Heritage’s Curtis Dubay says:
The MFA is anything but fair, because instead of leveling the playing field, it would tilt it decidedly against online retailers, particularly small ones. Brick-and-mortar stores would still have to collect sales taxes only where they are physically present. Online retailers would have to collect sales taxes from the nearly 10,000 sales tax jurisdictions around the country where their customers live. That is not an equal burden.For someone running—or thinking about starting—a small online business, trying to deal with tax codes for all of the states that charge sales tax is a huge deterrent.

Yet the Senate rushed this bill through. Americans for Tax Reform’s Grover Norquist said the rush itself was one of the reasons the Internet sales tax made it this far.
“It’s only passing the Senate because they took it out of regular order,” he said. “Why did they want to rush it through without amendments? Why did they do that? Because if people looked at it too long, it wouldn’t pass easily.”

The House is going to consider the bill through the normal committee channels, giving Members more time to review it and ask questions.

This also allows time for more facts to enter the debate and misconceptions to be exposed. Share this with your friends and family to spread the word.

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