Daines, Fox Brief Congress on Dangers of Internet Sales Tax Bill
Montana Congressman Steve Daines and Attorney General Tim Fox were in Washington Thursday discussing their concerns with the Internet sales tax bill.
The Internet sales tax bill, also known as the Marketplace Fairness Act, would enforce businesses based in states without sales taxes to collect sales taxes from out-of-state purchasers.
John Barnes with the attorney general's office said Montana businesses will carry an immense burden if this bill is passed.
"The bill would essentially, for Montana's purposes, would force states without sales taxes, to collect sales taxes from out-of-state purchasers," Barnes said. "Montana's businesses would be forced to collect whatever sales taxes those jurisdictions levy if someone from that jurisdiction makes a purchase from in the internet in Montana."
The House Judiciary Committee is set to hold a hearing on the bill on March 4.
"We're talking about an incredibly massive burden that this would place on Montana businesses," Barnes said. "It would discourage our businesses from growing into out-of-state markets. Montanan's have made it very clear that they don't want a sales tax and Montana's businesses don't want to be in the business of collecting the sales tax either."
At last summer's press conference announcing the launch of the multi-state coalition, Attorney General Fox was joined by more than a dozen Montana job creators and business owners also urging Congress to kill the online sales tax bill.
In the past, courts have rejected efforts to impose broader taxing responsibilities on companies that do not operate within a state because of the Commerce and Due process Clauses in the U.S. Constitution. If a business is not physically present in the taxing jurisdiction, or it does not have sufficient contacts with the taxing jurisdiction, courts have been reluctant to impose tax collecting duties on those companies.
Attorney General Fox will be providing testimony to the House when it meets on March 4.