Battle Over the Internet Sales Tax Intensifies

In recent weeks, several states have debated imposing an Internet sales tax on businesses operated within the state. California has already pushed through a new Internet sales tax, with Governor Jerry Brown signing the legislation and hailing it as a ‘tax revenue’ increaser. As with all government actions, there have been some unintended consequences with the new California law; Amazon and have shut down their affiliates based in California, taking thousands of jobs with them. On July 7, Amazon announced opening its fourth facility in neighboring Arizona, where no Internet sales tax exists. The new facility would bring in hundreds of jobs and is slated to open this fall. State governments should understand the basic formula that lower taxes and less government equates to more freedom and prosperity.

In Tennessee, Governor Haslam recently halted plans to tax Internet purchases in his home-state, but now wants to take the lead in seeing a federal version implemented.

“The whole streamlined sales tax is a big deal, and I’m more than willing to play a leadership role.” – Governor Haslam

Governor Haslam couldn’t be more wrong. A quasi-federalized tax plan would be disastrous to consumers and businesses alike, creating stringent regulations and compliance burdens on businesses, forcing them to shift as much of the costs as possible to consumers.  Senator Dick Durbin (D-Ill.) has been planning on introducing the Main Street Fairness Act of 2011 since April, but has yet to do so.  This delay is good news because the proposed federal tax would raise prices for consumers while thwarting the development of one of the most dynamic sectors of the economy.  Keep the pressure on your Senators and tell them you will not stand for new taxes, ask them to oppose the Main Street Fairness Act of 2011.