The Computer & Communications Industry Association (CCIA) believes that the approach taken by the Main Street Fairness Act is unwise in general and untimely given the current economic situation. The technology industry is prepared to be a constructive player in meaningful efforts at tax reform, but requiring Internet retailers, especially small ones, to collect taxes across thousands of jurisdictions is heading in the wrong direction.
The bill would allow states that have signed onto the Streamlined Sales and Use Tax Agreement to require out-of-state retailers to collect sales and use taxes on purchases made to residents of their states — regardless of physical presence. This “streamlined” Agreement still leaves in place thousands of different state and local tax jurisdictions and tax provisions that retailers would have to comply with – a legal and accounting nightmare.
Imposing tax collection burdens on small Internet businesses, which are some of the most promising candidates for future economic growth, is unjustified and unfair. Sponsored by Sen. Richard Durbin (D-IL) in the Senate and Rep. John Conyers (D-MI) in the House, the bills are similar to a House bill introduced by former Rep. William Delahunt last year, which CCIA also opposed.
The following statement can be attributed to CCIA President & CEO Ed Black:
“E-commerce has enabled businesses to broaden the scope of their activities beyond traditional geographic limitations. Sadly, this bill seeks to re-impose onto e-commerce businesses the very burdens that innovation has enabled them to overcome, and has given them a chance for success. It would even compound their burden by drafting them into service as remote sales tax collectors navigating the web of multiple tax jurisdictions.
“Penalizing businesses for utilizing technology and innovation is not fairness, but merely a shortsighted targeting of new revenue models, while protecting existing business models at the expense of consumers and growth.
“Innovation and entrepreneurship have always been the engines of our economic growth, and it is counterproductive to add to the administrative burdens of small businesses at the very moment we need them to provide jobs and lead our economic recovery. We hope that Congress instead takes the approach of H. Res. 95, which opposes imposing burdensome or unfair tax collecting requirements on small online businesses.”