Online sales tax bill may be dead on arrival in House
The online sales tax bill will face an uphill battle in the Republican-dominated House of Representatives, despite broad bipartisan support in the Senate.
The Marketplace Fairness Act, which will allow states the authority to collect sales taxes from online retailers outside of their state, is scheduled for a vote in the Senate in early May and is expected to pass. The fast tracking that it experienced in the Senate, however, is unlikely to be replicated in the House.
So far, Republican leadership has shown little interest in championing the issue of online sales taxation.
“A Boehner spokesman deferred to House Judiciary Chairman Bob Goodlatte (R-Va.), whose panel has jurisdiction over the online sales tax bill, and a spokesman for Cantor, Doug Heye, said only: ‘We’ll review what the Senate sends over,'” The Hill reported.
The issue has split Republicans, who typically stand firm in their resolution against tax increases. While the conservative Heritage Foundation and anti-tax-hike Americans for Tax Reform (ATR) have held firm in their opposition against what they call a tax increase, other Republicans argue it is an issue of states’ rights and tax fairness.
“The legislation… is about letting states set their own tax policy without asking Washington’s permission. That’s the spirit of the 10th Amendment to the U.S. Constitution, and the spirit of this country,” Tennessee Sens. Lamar Alexander and Bob Corker argued in an recent op-ed.
The National Governors Association (NGA) has also come out saying that this legislation does not violate the ATR pledge to not raise taxes.
“Marketplace Fairness… is not a new tax or a tax increase,” the NGA said in its statement. “It clearly does not violate the pledge. In fact, the American for Tax Reform themselves admitted to leadership of the National Governors Association that this was not a violation. To say anything else is disingenuous.”
“This is a last ditch effort to undermine legislation that upholds the principles of federalism and levels the playing field between Main Street and e-street,” the association added.
Rather that circumventing the traditional committee process as it did in the Senate, the bill will likely go through the House Judiciary Committee under the control of Rep. Bob Goodlatte of Virginia, who has expressed concern over the nature of the bill as it is written.
“I do not believe legislation like the Marketplace Equity Act is sufficiently simplified yet. While it attempts to make tax collection simpler, it still has a long way to go,” Goodlatte said in an earlier statement to The Daily Caller News Foundation.
“There is also concern that despite disclaimers, the bill could open the door for states to tax or even regulate beyond their borders,” he added. “I am open to considering legislation concerning this topic but these issues, along with others, would certainly have to be addressed.”
“We do have a ways to go,” Democratic Rep. Peter Welch of Vermont, a sponsor of the bill, told The Hill. “But we’re also much further along than we were a couple of years ago, or even a couple of months ago.”
The splitting in Republican ranks, though, is a sign of optimism for proponents of the bill. Currently, the bill has 24 co-sponsors in the House.
“Suggestions that the House Republicans are united in opposition to this are wishful thinking on the part of our opponents,” Jason Brewer, the Retail Industry Leaders Association vice president for communications and advocacy, told The Hill.
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