Washington — The Consumer Electronics Association (CEA) has commended guidelines for Internet sales tax legislation released yesterday by the House Judiciary Committee.
Committee chairman Bob Goodlatte (R-Va.) said the seven “principles,” which stress channel equality and ease of compliance, were drafted to help spark renewed discussion of an online tax bill in the House, following Senate passage of a Marketplace Fairness Act in May.
Michael Petricone, CEA’s government and regulatory affairs senior VP, said “Leaders in both parties recognize that differential tax treatment of online and brick-and-mortar retailers is unjustifiable and unsustainable. Meanwhile, municipalities and towns are forced to cut teachers, first responders and vital social services because they are unable to collect taxes that are owed under the law.
“We urge the House of Representatives to move quickly with common sense legislation to modernize our sales tax collection policies,” he said.
In a statement, Goodlatte noted that “Americans across the country are affected by the issue of Internet sales tax whether they are consumers or business owners. The aim of the principles is to provide a starting point for discussion in the House of Representatives. I greatly look forward to hearing fresh approaches to this issue and continuing the discussion.”
The Judiciary Committee’s principles include:
Tax Relief – Using the Internet should not create new or discriminatory taxes not faced in the offline world. Nor should any fresh precedent be created for other areas of interstate taxation by States.
Tech Neutrality – Brick-and-mortar, exclusively online, and brick-and-click businesses should all be on equal footing. The sales tax compliance burden on online Internet sellers should not be less, but neither should it be greater than that on similarly situated offline businesses.
No Regulation Without Representation – Those who would bear state taxation, regulation and compliance burdens should have direct recourse to protest unfair, unwise or discriminatory rates and enforcement.
Simplicity – Governments should not stifle businesses by shifting onerous compliance requirements onto them; laws should be so simple and compliance so inexpensive and reliable as to render a small business exemption unnecessary.
Tax Competition – Governments should be encouraged to compete with one another to keep tax rates low and American businesses should not be disadvantaged vis-a-vis their foreign competitors.
States' Rights – States should be sovereign within their physical boundaries. In addition, the federal government should not mandate that States impose any sales tax compliance burdens.
Privacy Rights – Sensitive customer data must be protected.