In a letter from November 15th to Paul Ryan, Speaker of the House, Kevin McCarthy, House Majority Leader, Steve Scalise, House Majority Whip and Bob Goodlatte Chairman, House Judiciary Committee President of Americans for Tax Reform Grover Norquist states:
Judiciary Committee Chairman Goodlatte has been diligent in working to develop a framework for a sustainable way to handle state taxation of cross-border sales, and taxpayers appreciate his work. When compared to the onerous burdens imposed on taxpayers and businesses alike by the misnamed “Marketplace Fairness Act” and its successor bills, positive progress has been made mitigating the ability of states to send regulations across their borders, and curtailing the ability of revenue departments to burden businesses outside their jurisdictions with audits and litigation. But this project is not yet ready to win the support of taxpayers, and is so far still short of its goals in important ways.
Because of substantive problems still remaining and, importantly, an improved environment for taxpayers in the next Congress, ATR strongly urges the House of Representatives to resist calls to consider any new cross-border sales tax measure that goes beyond confirming the existing Quill framework during the lame duck session.
Anyone concerned about protecting taxpayers or their constitutional rights should immediately rule out cutting deals with Harry Reid and President Obama on any sales tax legislation. We should instead be strictly focused solely on necessary funding of the government and preventing any “midnight” regulations from the Administration.
When the time is right, we still have some work to do. To be worthy of taxpayers’ consideration any remote sales tax legislation needs to allow taxation to take into account the different benefits and burdens applying to local outlets and online-only retailers. It should stop the state push for economic nexus and instead safeguard the physical nexus standard. It must preserve tax competition between the states on both rates and base. It must affect controls on state taxation authority such as BATSA. It must not implement an MFA-style regime in any retail sector.
There are currently no proposals before Congress that meet taxpayers’ requirements, with the exception of Congressman Sensenbrenner’s “No Regulation without Representation” bill, H.R. 5893. A vote in this Congress on anything other than H.R. 5893 would be a disservice of taxpayers, and ATR urges Congressional Leadership to resist the pressure from those businesses that would stand to benefit from doing so.
Taxpayers look forward to working with the Committee, the new Congress and President Trump to ensure that any future cross-border sales tax regime maintains the physical nexus standard, constitutional protections and tax and regulatory competition.