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Fw: Internet Sales Tax

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  • jeff
    Here s a good rebuttal out of the Maine RLC to the proposed Internet Sales Tax... Congress needs to hear it! jeff palmer
    Message 1 of 1 , Mar 21, 2013
      Here's a good rebuttal out of the Maine RLC to the proposed Internet Sales Tax...

      Congress needs to hear it!

      jeff palmer

      -----Forwarded Message-----
      >From: VictorB@...
      >Sent: Mar 20, 2013 10:34 PM
      >Subject: Internet Sales Tax
      >This material is by Maine RLC Board Member Bryan Daugherty.
      >The first part is the talking points. The latter part is the Maine action
      >resolution, which can be altered by state.
      >Internet Sales Tax Myths and Facts
      >As discussion continues over proposals like the “Marketplace Fairness Act”
      >– which would change the way states can exercise tax collection powers
      >over “remote” sales – several myths have cropped up.
      >Myth # 1: This is a States’ Rights Issue.
      >FACT: Giving states the power to collect sales taxes across their borders
      >isn’t about states’ rights, it’s about state coercion. Governments would
      >have fewer incentives to keep their own tax rates low, eroding the
      >important federalist principle of tax competition.
      >Myth #2: We need to enact this bill as soon as possible.
      >FACT: There’s no good reason to rush into such an enormous and
      >controversial tax policy matter. While some have stated this issue has
      >been on the docket for almost 10 years, the reality is that there is still
      >a lot of work to be done, such as holding hearings on alternatives to the
      >Marketplace Fairness Act.
      >Myth #3: Online stores enjoy a “special loophole.”
      >FACT: What Marketplace Fairness Act supporters call a “loophole” is
      >actually the physical presence standard, a firmly grounded constitutional
      >doctrine the Supreme Court has upheld for decades to protect businesses
      >and their customers from predatory tax administrators. The physical
      >presence safeguard helps to protect taxpayers from many types of
      >aggressive policies that could affect income, property and other taxes.
      >Myth #4: The Marketplace Fairness act will “level the playing field”
      >between online and brick-and-mortar stores.
      >FACT: While the Marketplace Fairness Act would require remote sellers to
      >collect sales tax on every item, it would force them to do so by a
      >completely different and harsher set of rules than currently exist for
      >brick-and-mortar sales. If the Marketplace Fairness Act were to pass,
      >states could strong-arm remote sellers into complying with more than 9,600
      >separate sales tax jurisdictions across the country, forcing online
      >retailers to quiz each and every customer about their residency –
      >something no brick-and-mortar retailer is required to do.
      >Myth #5: Compliance is easy.
      >FACT: Because they would now answer to 9,600 tax jurisdictions across the
      >country, remote retailers would have to shoulder heavy overhead costs just
      >to meet their new tax collection liabilities. The sponsors even recognize
      >this, however imperfectly, through a paltry exemption in the legislation
      >for businesses with remote sales of less than $500,000/year. However, a
      >2006 PricewaterhouseCoopers study demonstrated that small businesses with
      >sales between $1 million and $10 million still face enormous costs that
      >would threaten profitability, causing significant harm to interstate
      >commerce and the economy during an especially fragile time.
      >Myth #6: States need to collect Internet sales taxes to balance their
      >FACT: Instead of pursuing one cash grab after another, states need to cut
      >spending to get their budgets in order. Some standout states are actually
      >enjoying relatively good growth compared to their poorer neighbors – they
      >are the states that pursued free market reforms, eliminated waste, and
      >controlled growth of government to create a competitive economic climate
      >that attracts jobs and workers. The Marketplace Fairness Act nullifies an
      >important facet of that competition by doing away with the long-held
      >physical presence standard for taxation.
      >Myth #7: All the Internet retailers support it.
      >FACT: There is no consensus among online retailers in favor of
      >destination-based sourcing. As is usually the case when government gets
      >involved in the marketplace, those who would benefit the most from the
      >legislation are lobbying in favor of it, and those who would be harmed are
      >working hard to stop it. Nor is the general public clamoring for it. A
      >December 2012 Mercury poll of 800 likely voters asked the neutral question
      >about whether they supported “allowing states to make online retailers
      >collect and process sales taxes on Internet purchases based where the
      >customer is located, regardless of where the retailer is physically
      >located.” By a 48 percent-41 percent margin, respondents were opposed.
      >When given a more realistic description of the bill, “The proposed
      >legislation would allow tax enforcement agents from one state to collect
      >taxes from online retailers based in a different state,” opposition rose
      >dramatically: 61 percent to 28 percent.
      >Myth #8: This tax is the only, best fix to the problem.
      >FACT: Instead of creating schemes that could open-up a Pandora’s box of
      >unstoppable tax-grabs on the part of cash-starved states on unsuspecting
      >citizens, states could move forward with origin-based sourcing sales tax
      >plans, where the business charges all customers one rate of tax, based on
      >the jurisdiction in which that business is located. If Congress takes any
      >action on Internet sales tax collection, it should be in pursuit of
      >uniform origin-based sourcing to preserve proper limits to taxing
      >authority and encourage tax competition.
      >Myth #9: Retail sales on the Internet are “tax-free.”
      >Fact: Under existing law, a remote mail-order or Internet sale between a
      >customer and a business located in the same state is subject to sales tax
      >– a not uncommon occurrence in large states. Furthermore, Internet-based
      >businesses pay profit and property taxes the way many other businesses do.
      >Because they rely so heavily on telecommunications to stay connected, some
      >online sellers may have proportionally heavier burdens of taxes associated
      >with these technologies. When customers shop on the Internet, the shippers
      >pay fuel and other types of transportation taxes.
      >Myth #10: The Internet is “destroying Main Street businesses.”
      >Fact: The Internet has enabled “Mom and Pop” retailers to advertise their
      >products and services to a whole new world of consumers. It has also
      >provided practical money-saving technologies that have allowed numerous
      >traditional firms to survive and thrive, including online tax preparation
      >services, better inventory management, and ease of ordering various inputs
      >necessary to producing their finished goods. In 2012, research by The
      >Boston Consulting Group found that “small and medium-sized companies that
      >embrace the Internet in their business operations grew by 10 percent
      >annually in the last three years, adding jobs as they did so.”
      >Online commerce has revolutionized American small business by allowing a
      >Main Street store anywhere to become a Main Street store everywhere.
      >But Main Street retail businesses will no longer to be able to continue to
      >compete online with larger enterprises if the government begins to add new
      >tax burdens that increase the advantage of bigger operations.
      >These new burdens have absolutely nothing to do with the federal budget
      >process – and amount to using backdoor politics to increase tax burdens on
      >small businesses. These additional tax burdens will only help mega
      >retailers get bigger, and curtail growth, stymie competition and cost jobs
      >among small businesses, online and offline.
      >I need your help! I would like the Maine RLC to take action immediately by
      >sponsoring this resolution as well as writing your elected
      >representatives, voicing your concern and strongly urging them to withdraw
      >any public support and vote NO on this amendment.
      >Therefore, I am asking that this be placed for consideration on the next
      >meeting agenda.
      >Thank you for your vigilance!
      >Resolution and Public Petition Opposing the Market Place Fairness Act (S.
      >336/HR 684)
      >Whereas, in the case of Quill Corporation v. North Dakota 504 U.S. 298
      >(1992), the United States Supreme Court rules that businesses that do not
      >have a "physical presence" in a state cannot be forced to collect that
      >state's sales tax;
      >Whereas, the Quill decision protects online businesses from having to
      >incur the costs of acting as a tax collector for all 50 states, it
      >prevents all companies from having to pay sales taxes to a state
      >government where they have no representation, and blocks state government
      >tax enforcers from auditing and litigating against out-of-state
      >Whereas, the limits on the ability of state governments to enforce sales
      >tax burdens on out-of-state retailers promoted retail competition,
      >innovation and helped keep prices low to the benefit of all consumers;
      >Whereas, burdening the Internet with new taxes and regulations will harm
      >the American economy at a time when many Americans are struggling to find
      >jobs and provide for themselves and their families;
      >Whereas, the Market Place Fairness Act (S. 336/HR 684) would overturn
      >Quill and authorize states to "deputize" all US internet merchants to
      >collect sales taxes for all states, including all of the states where they
      >do not reside or operate;
      >Whereas, the National Internet Sales Tax Mandate represents a major tax
      >increase on every American who shops online;
      >Whereas, the National Internet Sales Tax Mandate forces on-line businesses
      >to know the details of each state and locality's sales tax laws, thus
      >creating a different pricing structure for each customer depending on
      >where they live. These companies would then have to figure out how much
      >tax they owe each state and locality, send the corresponding payments, and
      >be subject to audits and enforcement action in each state;
      >Whereas, these compliance threats and costs will further raise the prices
      >of goods purchased over the Internet;
      >Whereas, the compliance costs of the National Internet Sales Mandate will
      >discourage the growth of Internet-based business, thus hampering the
      >development of the most dynamic sector of the American economy;
      >Whereas, the Internet Sales tax mandate could encourage states to raise
      >their sales taxes instead of addressing their fiscal crisis with serious
      >spending cuts and reforms;
      >Whereas, governments and tax collectors have always preferred to target
      >citizens and businesses who they do not represent and do not have the
      >power to democratically remove them from governing positions;
      >Whereas, the eternal desire of governments, including the US States, to
      >tax those who they do not represent and are beholden to led to the
      >American principle of "No Taxation Without Representation";
      >Whereas, the original intent of the Commerce Clause was to enable Congress
      >to guarantee free trade among the states by ensuring states could not
      >impose onerous regulations or taxes on out-of-state businesses;
      >Whereas, the National Internet Sales Tax Mandate, by giving states the
      >power to level taxes on inter-state transactions flips the Commerce Clause
      >on its head and dramatically expands the reach and power of government in
      >the Internet Age;
      >Therefore, be it resolved that:
      >The Republican Liberty Caucus of Maine opposes the National Internet Sales
      >Tax Mandate;
      >We call on Senator Susan Collins to remove their name as a cosponsor of S.
      >336, the Senate version of the National Internet Sales Tax Mandate;
      >We call on Senator Angus King to remove their name as a cosponsor of S.
      >336, the Senate version of the National Internet Sales Tax Mandate;
      >We call on Representative Chellie Pingree to remove their name as
      >cosponsors of HR 684, the House version of the National Internet Sales Tax
      >We call on all members of the Maine congressional Delegation to publicly
      >pledge to oppose the National Internet Sales Tax Mandate;
      >We call on Governor Paul LePage to withdraw his support and publicly
      >request that the National Governor’s Association officially withdraw its
      >support of the National Internet Sales Tax Mandate.
      >We call on Governor Paul LePage to publicly oppose the National Internet
      >Sales Tax Mandate.
      >Chief Sponsor - Bryan Daugherty
      >Co-Sponsor - Michelle Anderson
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