Hodes Offers Resolution Opposing Net Sales Tax Bill
Rep. Paul Hodes, D-N.H., introduced a resolution Thursday opposing legislation that would close a loophole that would allow states to mandate that online and catalogue retailers collect sales taxes from customers who live in states where the firms do not have a physical presence.
"It is the sense of the House of Representatives that Congress should not impose any new burdensome or unfair tax collecting requirements on small online businesses, which would ultimately hurt the economy and consumers in the United States," according to the text of the nonbinding resolution.
The resolution is aimed at countering a bill offered by Rep. Bill Delahunt, D-Mass., that would close a loophole from a 1992 Supreme Court decision that said retailers are not required to collect sales taxes from customers in states where they do not have a physical presence. It would allow states who joined a multi-state compact aimed at simplifying state tax rates and rules to mandate that online and catalog retailers collect sales taxes from remote sales.
Sen. Mike Enzi, R-Wyo., is working on a bill similar to Delahunt's measure and is hoping to attract bipartisan support for the measure before introducing it, a spokeswoman said.
"New Hampshire's small businesses and entrepreneurs already have to compete with giant retail chains selling cheap foreign imports," Hodes said in a statement. "The last thing they need is a new tax that will increase costs, expand regulations, and drive them out of business."
New Hampshire itself doesn't impose sales taxes, though online businesses based in the state could be required to collect taxes from customers who live in states with sales taxes under Delahunt's bill, a Hodes' aide noted. On Hodes' claim that the bill would impose a "new" tax, an aide to Delahunt disputed this, saying it only would ensure that online firms collect the same state sales taxes that brick-and-mortar retailers collect now.
Hodes' resolution was offered on the same day that Delahunt, along with Gov. Mike Rounds, R-S.D., and state Rep. Chris Rants, R-Iowa, former speaker of the Iowa House, held a news conference with representatives from state and local groups as well as the National Retail Federation to rally support for Delahunt's bill. They say states are set to lose an estimated $23 billion by 2012 in sales taxes because of the loophole.
Delahunt argued that the bill is "at its core about fairness, simple fairness." Rants added that states are "not asking the federal government for a handout" but the ability to "collect the taxes we're owed."
But Steve DelBianco, executive director of NetChoice, which includes online firms such as eBay, Expedia and Yahoo, said in a conference call that the $23 billion figure is exaggerated and that the cost and difficulty of having to collect sales taxes from thousands of jurisdictions and answer questions from customers and state tax officials would pose a significant burden for small online retailers in particular.
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