TN Congressmen Torn on Taxing Online Sales

While Sens. Lamar Alexander and Bob Corker are big supporters of the “Marketplace Fairness Act,” which would allow states to collect their sales tax from online retailers, Tennessee’s U.S. House delegation is torn on the subject, reports The Tennessean.
Americans for Tax Reform, headed by anti-tax lobbyist Grover Norquist, contends the proposal is a tax grab that could open the door for other ways for states to attempt to tax businesses and individuals with no physical presence within their borders.
“This leads to only ugly places,” Norquist said in an interview.
Once they have the geographic distribution of a firm’s sales taxes payments, states could argue that they are entitled to a similar percentage of a firm’s overall revenues.
“They do it now with jock taxes,” he said, referring to some states’ attempts to tax out-of-state athletes’ income if they played a certain percentage of their games within their borders.
…(F)irmly opposing the bill is Rep. Marsha Blackburn, R-Brentwood.
“There is nothing fair about the Marketplace Fairness Act currently being considered by the Senate,” she said in a statement.
“We don’t need the federal government mandating additional taxes on Tennessee families and businesses. The American people have been taxed enough.”
At least half of the state’s other eight members in the House remain undecided.
For instance, Patrick Newton, aide to Republican Rep. John Duncan of Knoxville, said: “At this time, Congressman Duncan has very mixed feelings about the bill. He hates to increase taxes on anyone; but on the other hand, he hates to give an advantage to big out-of-state companies that we don’t give to local small businesses.”
Meanwhile, Democratic Reps. Jim Cooper of Nashville and Steve Cohen of Memphis said they were happy to co-sponsor a House version.
“This is not a new tax but the collection of an existing one, and everybody should be for that. Online retailers should follow the same rules that Middle Tennessee’s small businesses do,” Cooper said.

One thought on “TN Congressmen Torn on Taxing Online Sales

  1. Eric H

    U.S. Constitution, Article 1, Section 10 states in part:
    No state shall, without the consent of the Congress, lay any imposts or duties on imports or exports, except what may be absolutely necessary for executing it’s inspection laws: and the net produce of all duties and imposts, laid by any state on imports or exports, shall be for the use of the treasury of the United States;
    The states are not entitled to this money beyond the costs of inspection (which they are not going to do so that is zero). The federal government regulates interstate trade.

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