SHAHEEN: INTERNET SALES TAX WOULD BE DISASTROUS FOR ECONOMY, NEW HAMPSHIRE BUSINESSESJuly 17, 2014
(Washington, DC) – U.S. Senator Jeanne Shaheen (D-NH) spoke on the Senate floor this afternoon to express her strong opposition to any legislation that would force New Hampshire businesses to collect sales tax for other states on online sales. Shaheen has been a vocal opponent against an online sales tax, has filed amendments to exempt New Hampshire from an online sales tax and yesterday led a bipartisan coalition urging Senate leadership to extend the Internet Tax Freedom Act (ITFA) without provisions that would create a burdensome online sales tax.
Shaheen’s remarks as prepared for delivery are included below:
Madam President, I’ve come to the floor today to reiterate my opposition to legislation that would impose new tax burdens on businesses in New Hampshire and have a serious impact on our economy.
Earlier this week, Majority Leader Reid started a fast-track process to bring a bill to the floor that includes the so-called “Marketplace Fairness Act.”
This is legislation that would, for the first time, allow states to collect sales taxes from businesses in New Hampshire.
As a result, this bill would impose significant new tax compliance burdens on entrepreneurs in New Hampshire that are growing their businesses and creating jobs through the Internet.
In New Hampshire, we don’t have a sales tax, so our businesses aren’t used to collecting one. That’s why New Hampshire businesses are concerned that, if this bill passes, they will be forced to collect sales taxes for not just one state, but 46 other states and 9,600 taxing jurisdictions across the country.
The red tape would be a nightmare for small companies with only a few employees. I heard from one small business owner in Hudson, New Hampshire, whose business is approaching $1 million in revenue. But his company has just six employees.
Under the legislation the so-called “Market Place Fairness Act”, this company might be considered a large business. The company has plans to grow, but it would be forced to reconsider as it approaches this arbitrary threshold.
E-Commerce has been a real boon to small businesses in New Hampshire and across the country. It has helped companies find new markets for their products and new revenues.
But for companies looking to grow through online sales, this legislation represents an artificial ceiling for creating jobs and expanding through e-commerce.
Let me give you a few examples of how this legislation will increase burdens on small businesses:
- First, each state has different sales and use taxes, so businesses would need new software to figure out how to collect and remit the right taxes.
- Small businesses would also need to collect personal information from each buyer to make sure they are complying with all state and local sales taxes.
- These small businesses might then have to deal with audit and enforcement actions from other states. Small businesses might have to answer to taxing authorities in places where they have no representation whatsoever.
- And as states and localities consider new taxes, these small businesses would have no voice in that process because they have no representation in those jurisdictions.
These are just a few examples of the many unintended consequences this legislation would create. These burdens on small businesses will stifle e-commerce.
That’s why it was so disappointing to learn that the sponsors of the so-called “Marketplace Fairness Act” attached it to another measure that’s meant to encourage e-commerce – the Internet Tax Freedom Act, which bans taxes on Internet access.
The Internet Tax Freedom Act has broad, bipartisan support and I’m proud to be an original cosponsor of this legislation. Since 1998, the Internet Tax Freedom Act has kept the Internet free of new taxation, which has helped the Internet flourish into the driver of economic activity that it is today.
Unfortunately, the law that bans new Internet access taxes expires this November and Congress must take action to keep the Internet tax-free. I strongly support keeping the Internet tax free, and the vast majority of the Congress supports it. In fact, the House voted this week to make this ban permanent.
The Internet Tax Freedom Act could pass the Senate and the House today with strong bipartisan support, yet based on the action earlier this week, the Senate may be asked to consider a bill that includes new tax burdens on small businesses. That’s right -- on a bill that’s meant to keep the Internet free from taxation, there is an effort to impose new tax collection burdens on Internet retailers.
That not only doesn’t make sense, I think it’s just wrong.
Just yesterday, I wrote a letter with bipartisan group of my Senate colleagues urging our leadership to bring a clean Internet Tax Freedom Act bill to the floor. I was joined by Senators Cruz, Ayotte, Tester, Merkley, and Paul.
We believe that the Internet should be tax-free, and that we should pass this noncontroversial legislation as soon as possible.
And we think it’s wrong to use a critical, must-pass extension of a law to keep the Internet tax-free as a vehicle to pass a fundamental shift in how e-commerce operates.
Combining these two very different issues into one bill does nothing to protect New Hampshire small businesses from the flawed, so-called “Marketplace Fairness Act”. That’s why I’m planning to do everything in my power as a Senator to block the new Internet sales tax legislation from moving forward. It’s bad for New Hampshire. It’s bad for small businesses. And it’s bad for our economy.
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