House Judiciary Chairman Bob Goodlatte has released seven principles that establish requirements for any Remote Seller Tax Collection legislation. The Marketplace Fairness Act (MFA) is incompatible with all seven principles, rendering the MFA non-viable in the House of Representatives. The principles are reasonable and, inasmuch as they are all followed with exactness, they are in harmony with the eMainStreet stance. While Chairman Goodlatte’s principles establish a fixed, minimum threshold for any future legislation, they do not constitute an admission that the current standard – physical presence – should be changed. In fact, the current physical-presence standard satisfies all seven of Chairman Goodlatte’s principles. We are also pleased that the American people are overwhelming opposed to legislation that violates these principles.
Rep. Goodlatte’s Basic Principles on Remote Sales Tax
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 & Mortar, Exclusively Online, and Brick & 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 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-a-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.