Things are getting a bit heated on Capitol Hill and no, we’re not referring to the ongoing ethics investigation surrounding New York congressman Charlie Rangel.
Online sales taxes were at the forefront yesterday as members of Congress on both sides of the issue squared off to promote competing pieces of legislation—Rep. Bill Delahunt’s bill to implement a tax, and a new House of Representatives resolution introduced by Rep. Paul Hodes (D-NH) that opposes it.With two legislative sides now firmly established on the issue, it is the start of what could be a big battle that merchants and retailers across the country should be keeping a close eye.
The Hodes resolution already has bipartisan support from four representatives and essentially runs counter to Delahunt’s bill, The Main Street Fairness Act, which was introduced on July 1. As we outlined in our post at the time, Delahunt’s proposed legislation would empower states that abide by the Streamlined Sales and Use Tax Agreement to force online retailers to collect sales taxes from customers within that state whenever they make a purchase online. Catalog retailers would also be forced to collect tax revenue under the bill.
While the resolution from Rep. Hodes does not reference or mention either Delahunt’s proposed law or the SST Agreement by name, there’s little doubt as to what its aim really is:
“…any federal legislation that would upset [the Internet’s] open and fair environment and impose new onerous and burdensome tax collecting schemes on hundreds of thousands of small online retailers would not only adversely impact thousands of jobs and reduce consumer choice, but would also effectively put an end to the robust e-commerce marketplace that consumers in the U.S. currently enjoy,” the resolution states.
It goes on to say, “Congress should not impose any new burdensome or unfair tax collecting requirementson small online businesses, which would ultimately hurt the economy and consumers in the U.S.”
Already NetChoice, an advocacy coalition of online merchants, consumers and related entities has come out in support of the Hodes resolution, claiming that adhering to any sales tax law for online purchases would likely cost small retailers up to 15 percent of the tax they’re actually collecting, ahefty figure to say the least in these tough economic times.
NetChoice also disputes an estimate given by the governing board of the SST, which claims $18.6 billion in online sales tax revenue could be collected if something like The Main Street Fairness Act was implemented.
We’ve had some great feedback from you on this issue over the past few weeks and we want it to continue. Obviously we’re seeing battle lines being drawn in Congress over a proposed internet sales tax, and despite the fact that the bills in question are both authored by Democrats, we forsee it becoming a long and potentially messy fight in this election year. But we want to hear from you…leave us a comment with your thoughts, opinions, etc.
