Melugin: Keep Online Sales Taxes out of Omnibus Budget Bill


Today Jessica Melugin, associate director of CEI’s Center for Technology & Innovation, joined U.S. Senator Steve Daines (R-MT) and representatives from a number of other free-market organizations at a Capitol Hill press conference to oppose efforts by members of Congress to include an Internet sales tax in the upcoming omnibus spending bill.

Lobbyists are calling for legislation to expand sales tax collection to online purchases, specifically the Remote Transactions Parity Act (H.R. 2193). This legislation is a small business killer that would result in an unprecedented expansion of states’ power to tax entities outside their borders and a tax hike for consumers.

Currently, a 1992 Supreme Court decision, Quill v. North Dakota, prevents states from collecting sales tax revenues from businesses with no physical presence in that state. According to Melugin, this isn’t a tax loophole or a prejudice against brick-and-mortar businesses; it’s the principle of “no taxation without representation” in action. Next month, the court will hear a challenge to Quill in case a called South Dakota v. Wayfair, Inc., where the Supreme Court could preserve or eliminate long-held limits on what and where states can tax.

Read Jessica Melugin’s remarks at the Senate press conference below:

An Internet sales tax may help politicians and big box stores, but it will harm every American who shops online. It is a de facto tax hike.

And this harmful legislation is incredibly unpopular – 66 percent of Americans oppose an Internet sales tax.

The Internet has provided opportunities for so many entrepreneurs to start their dream businesses at low costs, but this bill puts their futures at risk.

Americans with small online businesses will be burdened with compliance costs that could put them out of business, which means higher prices and fewer options for everyone. They don’t have the army of accountants and lawyers that big businesses have.

But that’s the point, these big box stores are lobbying Congress because they know the little guys can’t compete with an Internet sales tax. They are rigging the game.

Congress needs to stop listening to politicians and lobbyists and instead listen to the people they represent. And that means rejecting Internet sales taxes that take more money out of our pockets and puts it in the hands of politicians.

Thank you.

Watch the video of the press conference here.

Read the letter to Congress opposing the Remote Transactions Parity Act here.