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Under existing law, the government plays favorites among different businesses via discriminatory tax policies.
Thursday, September 26, 2013
Business advocates seeking a more equitable tax policy for Internet sales have been riveted to Rep. Bob Goodlatte’s every word and eyebrow twitch, hoping for a sign that he might support the Marketplace Fairness Act.
The chairman of the House Judiciary Committee gave them cause for optimism last week when he released seven principles to guide development of parallel legislation with the same primary goal. That goal is to close an online sales tax loophole handicapping local businesses like those supporting the economy here in the Roanoke Valley and across the commonwealth.
Under existing law, online-only retailers are not required to collect sales taxes, a normal part of doing business for bricks and mortar merchants. In other words, the government is playing favorites among different businesses via discriminatory tax laws.
Goodlatte’s principles favor “tech neutrality.” The 6th District Republican agrees “businesses should all be on an equal footing” with regard to sales taxes. He also advocates for a simple system without an exemption for smaller Internet retailers.
The Marketplace Fairness Act passed the Senate this spring in a bipartisan vote. It contains an exemption for online businesses that collect less than $1 million in out-of-state revenues.
In the House, the legislation has 60 co-sponsors, including Reps. Morgan Griffith, R-9th, and Bobby Scott, D-3rd, arguably the most philosophically divergent members of Virginia’s delegation. Online retail giants Amazon and Wal-Mart also support the legislation, although eBay remains a hold-out.
Grover Norquist of Americans for Tax Reform, who predictably opposes the measure, crowed this week that Goodlatte’s principles are proof the legislation is a “non-starter in the House.” In reality, Goodlatte is signaling that he would want to make some changes to the bill. Given the heavy workload his committee is shouldering on immigration, the National Security Agency and other matters, his decision to invest time in developing principles on online taxes suggests he is taking the issue seriously.
That’s good. Congress has cogitated over this matter for the past decade. It’s time for action, and Goodlatte is in a position to make it happen.
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