In Letter to Senate Leadership, Shaheen, Tester and Merkley State Their Strong Opposition to Advancing Internet Sales Tax Legislation

***Senators cite the disastrous impact this legislation would have on small businesses in their states***

April 22, 2016

(Washington, DC) Today, U.S. Senators Jeanne Shaheen (D-NH), Jon Tester (D-MT) and Jeff Merkley (D-OR) wrote to Senate leadership to express their opposition to internet sales tax legislation advancing in the Senate. In a letter to Senate Majority Leader Mitch McConnell and Senator Minority Leader Harry Reid, the Senators, who represent states without sales taxes, outlined the disastrous impact an online sales tax would have on small businesses in their home states.

“By reaching new markets across the country, small online retailers have been able to grow their businesses and create jobs,” the Senators wrote. “Unfortunately, Internet sales tax proposals have the potential to stifle that growth by imposing new red tape and creating the potential for abusive audits from states in which our small businesses have no representation.”

The letter continues, “Our states will face these burdens without seeing any benefits from Internet sales tax legislation…we will strongly oppose any bill that will impose undue collection burdens on our small businesses and consumers."

Although New Hampshire, Montana and Oregon do not have sales taxes, proposed internet sales tax legislation would force businesses in these states to collect sales taxes for 46 states and 9,600 taxing jurisdictions across the country. Several reports have suggested that Senate leadership intends to bring up such legislation this year. In their letter, the Senators made clear that they would object to any effort to do so.

The entire letter is included below and can be view here.

April 22, 2016

The Honorable Mitch McConnell                                                               The Honorable Harry Reid

Majority Leader                                                                                                                Minority Leader

United States Senate                                                                                     United States Senate

The Capitol, Room S-230                                                                               The Capitol, Room S-221

Washington, D.C. 20510                                                                Washington, D.C. 20510

Dear Leader McConnell and Leader Reid:

We write today to indicate our continued opposition to federal legislation to impose sales tax collection requirements on small businesses operating on the Internet. As representatives of states that do not have a sales tax collection requirement, we will object to any effort to advance such legislation in the Senate this year.

For small businesses that have been able to reach new markets through the Internet, online sales have become an increasingly important source of their success. By reaching new markets across the country, small online retailers have been able to grow their businesses and create jobs. Unfortunately, Internet sales tax proposals have the potential to stifle that growth by imposing new red tape and creating the potential for abusive audits from states in which our small businesses have no representation.

This burden will be especially difficult for small businesses, which have no experience collecting a sales tax. As a result of these requirements, online retailers with no experience collecting a sales tax would face daunting red tape and bureaucratic hurdles dealing with thousands of tax jurisdictions across the country. This would be a disaster for these companies, which lack the time and resources to collect sales taxes for other states. Our states will face these burdens without seeing any benefits from Internet sales tax legislation.

As you know, Congress recently took a major step to keep the Internet tax free by passing and making permanent the Internet Tax Freedom Act (ITFA). Some have suggested that ITFA’s enactment will help pave the way for passage of an Internet sales tax bill. We disagree, and we will strongly oppose any bill that will impose undue collection burdens on our small businesses and consumers.

As the Senate considers future tax legislation, we are committed to protecting small businesses and to ensuring that our states are able to make their own sales tax decisions. It is critical that any Internet sales tax legislation does not impose new compliance burdens on small companies.

We appreciate your attention to this issue, and look forward to working with you to ensure that small businesses in our states are protected.

Sincerely,

Jeanne Shaheen                                              Jon Tester                                       Jeff Merkley

United States Senator                                   United States Senator                   United States Senator