On March 19, a letter from Americans for Tax Reform to members of
the United States Senate made a number of inaccurate statements regarding the Marketplace
Fairness Act. The letter mischaracterizes existing law, distorts the impact of
the proposed legislation and makes completely absurd assertions about consumer
privacy. Below is a rebuttal of some of the more erroneous claims in the
achieving “fairness” may be a laudable goal, it cannot be an excuse for
increasing the burden on taxpayers. We believe that there are a number of
problems with the Marketplace Fairness Act – most importantly, the bill would
force customers to pay more in taxes.
Marketplace Fairness Act does not increase the burden on taxpayers or force
customers to pay more in taxes. Quite the opposite, the bill would
allow states to compel online retailers to collect the sales tax at the point
of purchase, just as brick and mortar stores do. This would actually
alleviate the burden for taxpayers who under existing law in most states are
required to calculate and remit this tax themselves, a backward and confusing
process. This tax is already owed, so by definition cannot be
considered a tax increase.
can choose to tax their customers at the point of sale or pay what they owe
in sales tax at the end of the year.
the collectors of sales tax, not the payers. Consumers pay the sales
tax, retailers merely collect and remit the appropriate amount in the 45
states that have a sales tax.
audit, it is the business that is responsible for settling any outstanding
balances. The IRS does not pursue consumers over individual purchases.
are a function of the states, not the federal government. The IRS has
no jurisdiction whatsoever in the collection or remittance of sales taxes.
This is simply a red herring. No business will be audited by the IRS as
a result of the Marketplace Fairness Act.
In order to
collect the proposed remote sales tax, businesses would be forced to send
personal information about their customers to a host of state revenue
LUDICROUS. Retailers do not send information about their customers to
state revenue departments. Never have, never will. This is a
greater concern is that a remote sales tax will create competition among the
states for higher taxes, rather than lower rates.
ATR’s concern about lower sales taxes, but this argument again falls
flat. Consumers pay sales taxes, not businesses. Whether a
purchase is made at a local store or online, under MFA, the sales tax
collected from the consumers is their local sales tax. If
consumers/taxpayers are unhappy with that rate, they have the opportunity to
vote out their elected officials. This ensures that those who do pay
the sales tax—consumers—are taxed where they are represented.