April 2013
Word Count 238
QuickPoint! –The Marketplace Fairness Act:
Taxation Without Representation?
By Kathryn Hickok
Congress is poised to raise taxes again, this time by allowing states to impose sales
taxes on online sales. Senators Ron Wyden (D-OR), Max Baucus (D-MT), and
Kelly Ayotte (R-RH)―all representing states without sales taxes―oppose the
Senate’s “Marketplace Fairness Act” as “taxation without representation.” The
proposed legislation would burden online businesses with enforcing potentially
thousands of state and local taxes across the country at the point of sale.
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Andrew Moylan, senior fellow with the R Street Institute in Washington, D.C.,
writes, “This means quizzing purchasers about their location, looking up the
appropriate rules and regulations in more than 9,600 taxing jurisdictions across the
country, and then collecting and remitting sales tax for that distant authority. No
brick-and-mortar shop has to do this for in-store sales, and yet every online retailer
would have to do it for remote sales.”
In an editorial this week, The Wall Street Journal added: “Small online sellers will
therefore have to comply with tax laws created by distant governments in which
they have no representation, and in places where they consume no local services.”
Senator Dick Durbin (D-IL) claims tax accounting software makes it easier for
smaller businesses to comply with the proposed law than opponents allege. Still,
forcing retailers to enforce the tax laws of thousands of different localities across
the country is a massive change in the way we do business―one that will have farreaching consequences for small businesses and consumers alike.
Kathryn Hickok is Publications Director and Director of the Children’s
Scholarship Fund-Portland program at Cascade Policy Institute.
Phone: (503) 242-0900
Fax: (503) 242-3822
www.cascadepolicy.org
[email protected]
Cascade Policy Institute is a tax-exempt educational organization as defined under IRS code 501 (c)(3). Nothing
appearing in this Cascade Commentary is to be construed as necessarily representing the views of Cascade or its
donors. The views expressed herein are the author’s own.