Contact FreedomWorks

400 North Capitol Street, NW
Suite 765
Washington, DC 20001

  • Toll Free 1.888.564.6273
  • Local 202.783.3870

Blog

    Coalition Letter Opposing the Marketplace Fairness Act

    FreedomWorks has signed onto the following "Memo for the Movement", drafted by the Conservative Action Project, in opposition to the Marketplace Fairness Act, S. 743

    Memo for the Movement: Congress Must Reject the Internet Sales Tax
     
    Current Event:
     
    On April 25, the U.S. Senate passed a key procedural vote to consider S. 743 - the so-called Marketplace Fairness Act - nearly ensuring passage.  The bill expands the authority of individual states to cover out-of-state retailers, allowing them to force those retailers to collect sales taxes for them.  This is a dangerous extension of state power, violating core principles of federalism. At the same time, it subjects consumers, businesses, and entrepreneurs to thousands of state and local tax regimes. With Senate passage imminent, the House must reject this misguided bill.
     
    Action:

    • House Speaker John Boehner and Majority Leader Eric Cantor should not bring the Senate-passed bill directly to the floor.
    • Conservatives should reject any bill that expands the authority of out-of-state governments to regulate businesses with regard to online taxation.

     

    Issue in Brief:
     
    The 1992 Supreme Court decision, Quill Corporation v. North Dakota, bars states from requiring a retailer to collect sales taxes on its behalf, unless that retailer has a physical presence in the taxing state.  
     
    For example, a company whose workforce and warehouses are in New Hampshire, and which has no contacts with Illinois other than taking remote sales orders over the Internet cannot be required by the state of Illinois to collect sales taxes from customers living in Illinois.  
     
    Under the Marketplace Fairness Act, the Quill standard would be eliminated, allowing states that meet certain minimal streamlining standards to require retailers in all states to collect taxes for them.   
     
    As a result, retailers would be subject to laws imposed by states with which they have no direct connection, and in whose political system they have no voice.  It is regulation without representation, allowing politicians to raise revenue, without fear of a public backlash.   The result would be added costs for retailers and American consumers, directly through the sales taxes imposed, but also through the added burden of collecting the taxes for the 9,600 separate taxing jurisdictions in the U.S., each with its own unique definitions, holidays, and rates. It is also unfair to require online businesses to collect and remit sales taxes from all their customers based on their residence but not to require brick-and-mortar businesses to do the same.  No such requirement should exist for any type of business.
     
    A Congressional Research Service (CRS) report suggests the compliance burden associated with the bill would force businesses to set up shop outside of the United States, leading Sen. Ron Wyden (D-OR) to call the proposal the "Shop China Bill."
     
    Rather than pass this misguided legislation, Congress should pursue alternatives that encourage tax competition and preserve the American standard of geographical limits to tax authority.  As Rep. Jim Bridenstine (R-OK) said about the bill, "Taxes must be simplified not made more complex, reduced not expanded." We agree.
     
    Signed:
     
    David McIntosh
    Former Member of Congress
    Indiana
     
    Mike Needham
    CEO
    Heritage Action for America
     
    Grover Norquist
    President
    Americans for Tax Reform
     
    Jenny Beth Martin
    Co-Founder
    Tea Party Patriots
     
    Matt Kibbe
    President
    FreedomWorks
     
    Tim Phillips
    President
    Americans for Prosperity
     
    Brent Bozell
    Chairman
    For America
     
    The Hon. George Allen
    Former Governor and US Senator
    Virginia
     
    Tom Schatz
    President
    CCAGW
     
    Duane Parde
    President
    National Taxpayers Union
     
    David Bossie
    President
    Citizens United
     
    Phyllis Schlafly
    President
    Eagle Forum
     
    Eli Lehrer
    President
    R Street Institute
     
    Heather Higgins
    President
    Independent Women's Voice
     
    Phil Kerpen
    President
    American Commitment
     
    The Hon. Jim Ryun
    Chairman
    The Madison Project
     
    Becky Norton Dunlop
    Former White House Advisor
    President Ronald Reagan
     
    Bill Walton
    Chairman
    Rappahannock Ventures
     
    The Hon. Ken Cribb
    Former Domestic Advisor
    President Ronald Reagan
     
    Bob Reccord
    Executive Director
    Council for National Policy
     
    The Hon. Ken Blackwell
    President
    Constitutional Congress, Inc.
     
    Al Regnery
    Former Publisher
    American Spectator
     
    David Williams
    President
    Taxpayers Protection Alliance
     
    Gary Aldrich
    Chairman
    CNP Action, Inc.
     
    Chris Littleton
    President
    Ohio Rising
     
    Katie McAuliffe
    Executive Director
    Digital Liberty
     
    C. Preston Noell III
    President
    Tradition, Family, Property, Inc.
     
    Wayne Crews
    Vice President
    Competitive Enterprise Institute
     
    Christopher Malagisi
    President
    Young Conservatives Coalition
     
    J. Michael Smith, Esq.
    President
    HSLDA
     
    Fergus Cullen
    Executive Director
    Yankee Institute for Public Policy
     
    Rebecca Hagelin
    Columnist
    The Washington Times
     
    Maurice Thompson
    President
    1851 Center for Constitutional Law
     
    David Y. Denholm
    President
    Public Service Research Council
     
    Matt A. Mayer
    President
    Opportunity Ohio
     
    Elaine Donnelly
    President
    Center for Military Readiness
     
    Tommy Sears
    Principal
    Capital Enterprise Associates, LLC
     
    Darian Rafie
    Vice President
    ActRight
     
    Susan Carleson
    President
    American Civil Rights Union
     
    John Dodd
    President
    Jesse Helms Center Foundation
     
    Ralph Benko
    Contributor
    Forbes.com
     
    Mike Stenhouse
    CEO
    RI Cntr. for Freedom & Prosperity
     
    Seton Motely
    President
    Less Government
     
    Paul Gessing
    President
    Rio Grande Foundation
     
    Craig Shirley
    Chairman
    Citizens for the Republic
     
    Richard Viguerie
    Chairman
    ConservativeHQ.com
     
    Peter J. Thomas
    Chairman
    The Conservative Caucus, Inc.
     
    Lew Uhler
    President
    National Tax Limitation Committee
     
    Mathew D. Staver
    Founder & Chairman
    Liberty Counsel
     
    Joe Balyeat
    Montana State Director
    Americans for Prosperity
     
    Jeff Mazzella
    President
    Center for Individual Freedom
     
    Karen Kerrigan
    President & CEO
    Small Business & Entrepreneurship Council