U.S. Senator Kelly Ayotte (R-NH) took to the Senate floor tonight once again to express her strong opposition to legislation that would impose new tax requirements on small online businesses. With Senate Majority Leader Harry Reid (D-NV) having announced just last week that the so-called "Marketplace Fairness Act" would be considered on a fast track basis - skipping the regular committee process - Senator Ayotte said that a thorough vetting of the bill would reveal its devastating impact on Internet businesses nationwide. Unfortunately, the Senate voted 74 to 20 tonight to invoke cloture on a motion to proceed to the bill.
"Supporters of the online sales tax are trying to rush it through the Senate before consumers and businesses can rise up to oppose it. That's why the bill's backers have skipped the usual committee process, to hide the details," said Senator Ayotte. "I will continue to use every tool at my disposal to stop this bill, which should go through the committee process and be revealed for what it is - a massive power grab that will turn online business owners into tax collectors for other states."
Senator Ayotte recently met with online retailers in Manchester and Portsmouth to discuss her strong opposition to the proposal, which she said is unfair to businesses in New Hampshire - a state that doesn't have a sales tax.
Senator Ayotte has worked diligently to protect New Hampshire Internet businesses from sales taxes. Last year, she introduced a bipartisan resolution expressing the sense of the Senate that no federal legislation should give states the authority to impose any new burdensome or unfair tax collecting requirements on Internet businesses and entrepreneurs.
Under current Supreme Court precedent, absent a sufficient connection, a state cannot force out-of-state Internet businesses to collect and remit sales taxes. For example, when a customer in Illinois buys a product from an online vendor based in another state that has no physical presence in Illinois, authorities in Illinois cannot currently compel the out-of-state vendor to send it the Illinois tax on that sale. However, cash-strapped states looking to plug budget holes continue to push for a new law that would force online retailers to collect sales taxes for jurisdictions nationwide.