States Want Small Businesses to Pay for Amazon’s Exemption

Digital Liberty's Katie McAuliffe wrote an opinion for Forbes, citing some serious legislative trickery by some republican governors.  Many governors and state legislators claim that unless the Marketplace Fairness Act passes, they will continue to lose out on millions of dollars in uncollected tax revenue from sales made by online retailers located outside of their state. The truth is they’ve inflated the numbers of just how much revenue they’re losing by creating a tax loophole just for Amazon – a tax loophole that’s going to expire in four months for the majority of states. In order to persuade Amazon to set up warehouses in their states, the states allowed them to temporarily ignore the requirement that they collect sales tax once they established physical nexus in their states.
Now they’re trying to convince Congress to impose an unfair tax collection burden on online retailers located outside their states. These states made a choice to forego sales tax revenues to lure in a big business, and now they expect small businesses to suffer for choices made by states they have no say in. The Marketplace Fairness Act isn’t about “leveling the playing field” or giving states taxes they need and deserve; it’s about vastly expanding the powers of states beyond their borders.
The full article can be found here.

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