States are looking to Washington to let them tax sales made over the Internet.
In a letter sent to Congress Tuesday, Washington Democratic Gov. Chris Gregoire and Tennessee Republican Gov. Bill Haslam urged Congress to quickly pass bills that have languished in the House and Senate for over a year that would require sales tax on all online purchases.
The governors pleaded that they “are unable to collect $23 billion in sales taxes owed annually from remote sales,” and that current practices are “in essence an unwarranted yet growing subsidy to Internet sellers at the expense of brick-and-mortar stores.”
Former Florida Gov. Jeb Bush has also come out in favor of such taxes, claiming online shopping is hurting the state’s revenue stream.
In a letter to current Florida Gov. Rick Scott, Bush writes, “It seems to me there has to be a way to tax sales done online in the same way that sales are taxed in brick and mortar establishments. My guess is that there would be hundreds of millions of dollars that then could be used to reduce taxes to fulfill campaign promises.”
An online sales tax has already been proposed in Florida.
“The state of Florida is losing jobs and money because people have been shopping online all year,” said state senator Gwen Margolis, a Democrat from Miami. “Our whole revenue source is sales tax in the state of Florida.”
Florida has no income tax and is therefore highly dependent on revenue collected from sales taxes. The proposed legislation would require Floridians to declare and pay sales tax on good purchased or delivered from out of the state.
“Florida has always had the use tax, but it’s never had anything to do with the Internet,” said Steve DelBianco, executive director of NetChoice Coalition, a group opposing the push to tax all goods purchased online.
“Truth is, shoppers go online for superior selection, lower prices, and greater convenience — not to avoid paying sales taxes,” DelBianco writes.
At the federal level, there has been some debate of the Marketplace Fairness Act, which was most recently proposed as an amendment to the National Defense Authorization Bill.
State lawmakers lobbied members of Congress last week in favor of the passage of the tax.
“The stars are finally aligning in our favor for passage,” Utah Republican state Sen. Curt Bramble told legislators during a Wednesday afternoon briefing on Capitol Hill. “The Marketplace Fairness Act permits Congress to provide funds for the states without funds coming from the states. We are asking for control over our own destiny.”
Proponents of the bill say that with the help of new technology, sales tax collection for online purchases will be significantly easier.
“Everyone says that this is going to cost small business money, but what it actually does is it saves businesses money … because it completely automates the sales tax process,” New York sheep farmer Sten Wilson argued to The Daily Caller News Foundation.
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