Seven Rules to Tax By
Rep. Bob Goodlatte
In a House Judiciary Committee hearing on March 12, Chairman Bob Goodlatte (R-VA) entertained proposals for alternatives to the Marketplace Fairness Act passed by the Senate last May which seeks to collect state sales taxes from remote sellers such as online retailers and catalog sellers. Goodlatte asked that the proposals satisfy these seven qualifications:
1. Tax Relief – Using the Internet should not create new or discriminatory taxes not faced in the offline world. Nor should any fresh precedent be created for other areas of interstate taxation by states.
2. Tech Neutrality – Brick-and-mortar, exclusively Online, and brick-and-click businesses should all be on equal footing. The sales tax compliance burden on online Internet sellers should not be less—but neither should it be greater—than that placed on similarly situated offline businesses.
3. No Regulation Without Representation – Those who would bear state taxation, regulation, and compliance burdens should have direct recourse to protest unfair, unwise, or discriminatory rates and enforcement.
4. Simplicity – Governments should not stifle businesses by shifting onerous compliance requirements onto them; laws should be so simple and compliance so inexpensive and reliable as to render a small business exemption unnecessary.
5. Tax Competition – Governments should be encouraged to compete with one another to keep tax rates low and American businesses should not be disadvantaged vis–à–vis their foreign competitors.
6. States' Rights – States should be sovereign within their physical boundaries. In addition, the federal government should not mandate that states impose any sales tax compliance burdens.
7. Privacy Rights – Sensitive customer data must be protected.