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Enzi leads charge on Internet sales tax [Wyoming Tribune-Eagle, Cheyenne](Wyoming Tribune-Eagle (Cheyenne, WY) Via Acquire Media NewsEdge) March 24--CHEYENNE -- After years of trying, U.S. Sen. Mike Enzi, R-Wyo., is hoping Congress will pass a bill to allow taxation of Internet sales. Along with U.S. Sens. Dick Durbin, D-Ill., and Lamar Alexander, R-Tenn., Enzi is a key sponsor of the Marketplace Fairness Act. The bill proposes giving states a means of levying sales taxes on interstate online and catalogue sales. Enzi says that would add billions to state and local governments nationwide, including some $290 million annually in Wyoming. The act got a boost on Friday when the Senate voted 75-24 to add an amendment to the 2014 budget bill endorsing it. While the amendment is a non-binding message of general support, Enzi spokesman Daniel Head said it also is a gauge of how senators might vote if the act does make it to the floor. Head said the idea behind the bill is not to impose a new tax but rather to close a loophole that online retailers have been using to keep prices lower as compared to "brick and mortar" retailers. "(Online) prices can (be lower by) 5 to 10 percent, depending on what the sales tax is in your local area," he said. "That really affects these local businesses." Head said the bill corrects a 1992 Supreme Court decision, Quill v. North Dakota. In that case, the court ruled that, under the Constitution's Commerce Clause, a business must have a physical presence in a state before that state can make it collect sales taxes. But the court also said Congress can overrule the decision through legislation. Head said the act, if passed, would not require states to establish Internet sales taxes. But it would give them that option to do that for any business doing more than $1 million in online sales every year. He added that states that do choose to charge the tax must provide free software to out-of-state, online retailers so they can calculate the amounts they need to collect. Enzi and his co-sponsors say there is broad support for the bill, including senators on both sides of the aisle. Head added that large retailers, including Amazon, Walmart and Target, also have lent their support. But support for the bill is not unanimous among electronic commerce businesses. One eCommerce trade association, NetChoice, has repeatedly spoken out against the act. In a Feb. 14 statement published online, NetChoice executive director Steve DelBianco said the act "would create an expensive and onerous new tax regime" for those businesses that use catalogs or eCommerce to reach their customers. "For years the principle has been that states should simplify their tax systems before asking Congress to broadly expand their taxing authority," DelBianco wrote, referring to the large number of taxing jurisdictions within states. "But this bill abandons that principle." While the act does call for participating states to streamline their tax structures when approving Internet sales taxes, DelBianco said many of the complexities ingrained in those structures would still be allowed. An example: requiring online businesses to honor tax holidays in any of the nearly 10,000 local tax jurisdictions nationwide. "Adding all of the regulatory burdens ... will be devastating to small businesses that operate on razor thin margins," DelBianco wrote. "The $1 million exemption level in this legislation isn't even enough to cover a mom-and-pop retail operation. "In fact, the states' own study showed that retailers under $1 million in sales already spend 17 cents for every tax dollar they collect for states." Cheyenne Mayor Rick Kaysen said the added sales tax that the act could provide would be welcome. But he added that he is still worried about how online taxes could be administered in a way that doesn't lead to headaches for smaller retailers. "When we know there's a loss of those types of sales tax revenues, that brings it to the forefront for consideration," Kaysen said. "But how does that taxation go forward and the collections as well " Kaysen also questioned how online sales taxes would work in the case of returns. While formulas exist for returned items to local stores, the mayor questioned how that might extend to one retailer selling to thousands of taxing jurisdictions. As for the Greater Cheyenne Chamber of Commerce, no official stance has been taken on the issue, President and CEO Dale Steenbergen said. But he added members will be discussing it soon. "We have some retailers who do primarily online business, like Sierra Trading Post," he said. "But we haven't talked about it in our action advocacy group yet. So (the Chamber won't stake out a position) until after they meet next month." ___ (c)2013 Wyoming Tribune-Eagle (Cheyenne, Wyo.) Visit Wyoming Tribune-Eagle (Cheyenne, Wyo.) at www.wyomingnews.com Distributed by MCT Information Services |