In the Shadow of the Senate: A New Tax Emerges

By Abraham Hamadeh on August 01, 2011

In the midst of chaotic negotiations between the Senate and the House over the debt ceiling, Senator Dick Durbin (D-Ill.) had another priority: introducing the Main Street Fairness Act, a new quasi-federalized Internet sales tax. Senator Durbin has been planning to introduce this bill for months and discreetly proposed it on Friday night, hoping to go unnoticed, much like he did with his legislation that introduced price controls on debit card “swipe fees.” Senator Durbin's bill hopes to lead a federal and state partnership to implement the Internet sales tax bill across all fifty states.

Shadow CongressThe new Internet sales tax hurts businesses and consumers alike, by overburdening companies with new regulations that will be passed on to consumers to the extent possible. It's no surprise some of the bill's most outspoken supporters are big-box retail stores such as Walmart, Target, Sears, Home Depot, and Best Buy. The bill ultimately hurts innovation and threatens to stifle Internet entrepreneurship.

Senator Dick Durbin doesn't have to look too far to see the ramifications of his new Internet sales tax bill. FatWallet, a small Internet start-up company was forced to relocate from Illinois to nearby Wisconsin due to the prospect of losing nearly 30% of its revenue from new regulations and taxes imposed by Illinois's statewide Internet sales tax passed earlier this year.

FreedomWorks has already helped defeat similar proposals in Tennessee and Texas this year and will continue to fight the new taxes at both the state and federal level. Tell your Senators, don’t tax the Internet!


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SRW's picture
Sten WilsonThere is a simple solution: TaxCloud (http://taxcloud.net). The statements by Ebay and other lager Internet merchants confuse me. My company currently uses a PayPal checkout button that works with TaxCloud's service so my business (with less than $50k in annual sales) already calculates, collects and remits sales tax for any jurisdiction in any state. It is simpler in most cases for my business to calculate and remit sales tax than to deal with shipping. Now I no longer pay to frustrate my account with outdated filing requirements and my business enjoys those savings as additional profit. If my business can manage to collect the legally due sales tax for my customers, why is it so hard for Ebay? Technology available freely on the internet (like taxcloud) is more than capable of handling sales tax calculation and remittance. Sorry everyone, the "too burdensome" argument carried merit in 1967 and in 1992 (when SCOTUS last ruled on this matter), but in the era of modern computing where Ebay maintains a dominant position, multijurisdictional sales tax calculation and remittance is easily accomplished. So what is the real reason Ebay and others chooses to evade supporting your schools, hospitals, infrastructure, libraries, parks and so much more? Federal Legislation proposed by Senator Durbin will restore profitability and ease the burden on small businesses while simultaneously relieving individual filing burdens for consumers as well as, and most importantly, enabling states to collect sales tax legally due. And yes I am a Republican and Senator Jim DeMint from South Carolina just stated on television "It's time to do what is best for our country."
42 weeks 11 hours ago
SRW's picture
Sten WilsonThis is in no way a new tax. Just because many continue to call themselves American's while engaging in the act of tax evasion and want to continue doing so is no reason to deny states to collect sales tax legally due. When a merchant fails to collect sales tax on an Internet purchase you the consumer are required to remit the tax due on your individual tax return. Your continuing sanctioning of tax evasion contradicts you mission of freedom. Freedom requires participation and equal application of all laws. Sales tax is due on all retail purchases whether purchased on the Internet or at a brick and mortar retailer. Technology now makes that possible.
42 weeks 11 hours ago
chrism12743's picture
Chris MartelYet another intrusion by the feds! How much longer can Americans tolerate this incredible power grab by the central govt.? If washington dc is allowed to control the internet, then you can kiss free speech goodbye!!! The internet is the one place where a person can still get unvarnished real news, once those jackals in washington get their hands on it, it is all over!
41 weeks 6 days ago