House GOP Takes Steps Towards Internet Sales Tax

Despite opposition from fellow House members and a majority of constituents, some Republican lawmakers are pushing forward with Internet tax proposals as part of a comprehensive package on the topic similar to the Senate's Marketplace Fairness Act.

In the next week or two House Judiciary Chairman Bob Goodlatte (R-Va) is expected to release a "set of principles,"  according to sources who are closely watching the legislation that spoke to The Hill this morning. The new set of guidelines and ideas from Goodlatte are slightly different from the Marketplace Fairness Act, which he and other top Republicans in the House including Speaker John Boehner (R-Ohio) were skeptical about when it passed through the Senate earlier this year.

The principles are expected to be "broad policy statements" with positions such as maintaining a simple system and not burdening businesses. A Judiciary aide told The Hill that "the House is currently examining all of the issues surrounding the collection of online sales taxes and working on alternatives to the bill passed by the Senate."

The bill that the Senate passed in a 69-27 vote in May would give states the power to tax the online sales of out-of-state businesses. The bill exempts businesses with less than $1 million in annual out-of-state sales. Naturally major retail chains are in favor of the bill and are lobbying heavily for the legislation to pass in the House. They argue that the current system gives an unfair advantage to Internet-only retailers.

The National Taxpayers Union and the R Street Institute circulated a the results of two polls last week that found that 57 percent of likely voters oppose an online sales tax bill, with even a plurality of Democrats against the measure.

"I think these poll results show that the public has seen the MFA, listened to its best arguments, and aren’t buying any of them," Pete Sepp of NTU told reporters on Friday. "I think they provide a very powerful indication of where the electorate is."

Andrew Moylan of R Street added that he believed Goodlatte was "appropriately skeptical" of the Marketplace Fairness Act, and that he didn’t see much chance of the bill surviving in the House in its current form.

"I think they have the basic idea right," said Moylan, who also said the groups’ new poll "reinforces that this is bad politics."

Source: The Hill

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