By Katherine Rosario
Kudos to Rep. Jim Bridenstine (R-OK), who is taking action in Washington to protect small online businesses from the negative effects of the so-called Marketplace Fairness Act. In a state like Oklahoma, this is a big deal. Rep. Bridenstine explains:
The Marketplace Fairness Act is federal legislation that empowers states to reach across their borders to compel internet businesses in other states to collect and remit taxes no matter where the online retailer is located. This would enable my state, Oklahoma, to charge sales tax (in some localities as much as 10%) to a business in New Hampshire when an Oklahoman buys something online from the New Hampshire business. The New Hampshire business would have to collect and remit the tax to Oklahoma, even though New Hampshire has a sales tax rate of 0.0%.
This bill, he states, would have "multiple unintended consequences."
We applaud Rep. Bridenstine for taking a strong stance for freedom. This internet sales tax would be a form of taxation without representation. Case in point, he notes, "Oklahoma online retailers could be required to open themselves to tax audits from 49 other states in addition to the IRS." And as we've noted, forcing businesses to manage roughly 9,600 taxing jurisdictions is a disaster waiting to happen.
This bill also bodes poorly for the future for a number of other reasons, not the least of which, many online businesses will simply move offshore rather than comply with all these additional burdens. Indeed, this bill has been dubbed the "Shop China Act" for that very reason.
Rep. Bridenstine concludes:
The current tax system is complex enough. Business decisions have been based on the current laws. Let's not change the rules in the middle of the game unless we have a real improvement. Taxes must be simplified not made more complex, reduced not expanded. There exists a solution, but this is not it. I intend to oppose the Marketplace Fairness Act.
Truly, this bill would be a disaster for a myriad of reasons, many of which Rep. Bridenstine has considered carefully and laid out clearly. We applaud him for his principled, thoughtful stance.