U.S. Sen. Jon Tester, D-Mont., and John Walsh, D-Mont., are co-sponsoring bipartisan legislation to protect Montana residents from paying sales taxes to other states and local governments when they shop online.
Tester and Walsh are supporting the Digital Goods and Services Tax Fairness Act, which ensures that states can only collect sales tax from their own residents when purchasing digital goods or services on the internet. Current law is vague and could result in Montana residents being forced to pay sales tax in other states - even when they are at home.
The senators say this bill will protect Montana consumers from unfair taxation by other states.
"Montanans shouldn't have to foot the bill for other states that can't balance their budgets," Tester said. "Imposing an online sales tax is overly complicated and will directly hurt Montana jobs and small businesses. "
"Small businesses drive Montana's economy and we should do everything we can to support their work, not add additional regulation and taxes to prevent their success," Walsh said. "Montanans have spoken time and again - our state doesn't need a sales tax. This is important legislation to ensure that Montana families and small businesses can continue making our own decisions on how best to support our economy and create jobs."
Imposing an online sales tax not only places a tax burden on consumers; it also forces online businesses to spend more time filing burdensome tax forms and remit taxes to jurisdictions where their customers live, but they have no presence.
Tester and Walsh's legislation will also prevent states from imposing a higher sales tax on digital goods and services bought online than for products purchased in person.