After years of lobbying Quill by critics, the Senate last year passed the “Marketplace Fairness Act,” which would have subjected retailers to tax authorities from all 50 states
What’s Wrong With the Latest Internet Sales Tax Bill
By Heritage Foundation James Gattuso, Curtis Dubay——Bio and Archives--June 24, 2015
Rep. Jason Chaffetz, R-Utah, recently introduced legislation to allow state tax collectors to require out-of-state retailers to collect taxes for them, even if the retailer has no connection to their state.
Called the Remote Transactions Parity Act (H.R. 2775), it has, like similar bills before it, troubling implications for Internet commerce and for principles of federalism. Under a 1992 Supreme Court decision known as Quill v. North Dakota, states have only been allowed to impose their tax rules on businesses if the business has some physical presence in their state, such as a store, factory or warehouse.
State tax collectors have long chafed under the Quill rule, as it limits their revenue. Other Quill critics argue that the rule creates an unlevel playing field between out-of-state, Internet retailers who need not collect sales taxes and locally-based “brick and mortar” firms who do. Customers, they argue, should have to pay the same amount of tax on a purchase regardless of where they buy a product.
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