The question over how much latitude states should have on taxing purchases beyond their borders has long been a contentious one, and some of the biggest retailers and Internet companies have put a great deal of lobbying muscle into the fight over the years. The issue has again made it to Congress’ agenda, with a hearing tomorrow on a bill, the No Regulation Without Representation Act, from the office of Rep. Jim Sensenbrenner (R-WI). The House Judiciary Committee’s Subcommittee on Regulatory Reform, Commercial and Antitrust Law will take up the issue with testimony from several witnesses, including the National Taxpayers Union’s Andrew Moylan.
My colleague Jessica Melugin recently summed up the issue like this:
The U.S. Constitution entrusts Congress to preserve healthy competition among the states—and to prevent states colluding to undermine it. The recently introduced No Regulation Without Representation Act (H.R. 2887) takes that charge seriously. By reinforcing competitive federalism, it would benefit all Americans. The No Regulation Without Representation Act would prevent states from imposing tax or regulatory obligations on businesses that lack a physical presence in that state. It also limits the definition of what qualifies as a tax-triggering physical presence to the long-established standards. This legislation will preserve healthy competition among states to the benefit of individual citizens.
See the following items for more background on sales taxes, e-commerce, and federalism:
- “States Are Secretly Trying to Tax Your Online Purchases,” op-ed by Jessica Melugin (6/22/17)
- “Congress Must Put an End to Online Taxation Without Representation,” op-ed by Jessica Melugin (5/16/17)
- “Why Internet Sales Taxes Bolster Bigger Government: A Primer on Leading Proposals and their Political Prospects,” Web Memo by Jessica Melugin (11/10/16)
And in the interest of highlighting how long the question of online sales taxes have been part of the D.C. debate, don’t forget to persue Jessica’s wisely-titled policy brief from over seventeen years ago, “Internet Taxation: Controversy Likely to Continue.”