Kaitlyn Ewing

ATR Urges Louisiana Lawmakers to Vote against Internet Tax

Posted by Kaitlyn Ewing on Monday, April 30th, 2012, 3:13 PM PERMALINK

ATR recently sent a letter to the Louisiana House of Representatives in opposition to House Bill 1114, legislation which seeks to impose an Internet and remote sales tax obligation on out-of-state businesses. ATR was joined by the National Taxpayers Union, the Taxpayers Protection Alliance, and Louisiana's Pelican Institute for Public Policy on the letter opposing the bill. If passed, it would discourage in-state investment and cause many in-state advertisers to go out of business, as has happened in other states with similar measures. It would also allow the state tax administrator to reach well across Louisiana's borders to force non-residents to comply with the state's tax laws. As a comparable piece of legislation was recently ruled unconstitutional in Illinois, HB 1114 does not pass constitutional muster for its violation of the Dormant Commerce Clause and the Supreme Court's ruling in Quill v. North Dakota.

Read the full text of the letter below.


April 30, 2012

Louisiana House of Representatives

RE: Oppose HB 1114, Internet Tax
Dear Legislator,
We write urging you to reject House Bill 1114 that would impose an Internet and remote sales tax collection obligation on out-of-state businesses. The bill runs afoul of the U.S. Constitution and would dissolve the critically important physical presence standard for tax collection, allowing the long arm of the tax collector to reach well beyond the state’s borders.
Louisiana would likely face litigation and a constitutional challenge if HB 1114 becomes law. The U.S. Supreme Court’s ruling in Quill v. North Dakota expressly forbids states from forcing out-of-state businesses with no physical presence to collect and remit sales taxes, as doing so is a violation of the Dormant Commerce Clause. HB 1114 attempts to circumvent the Quill decision and U.S. Constitution by presuming a company has nexus in Louisiana based on tenuous connections to third-party affiliates or Internet advertisers in the state. This flies in the face of the Supreme Court’s Quill holding and similar legislation was ruled unconstitutional in Illinois just last week.
If history is a guide, the measure will put thousands of Louisianans out of work as online retailers sever their connections to in-state affiliates. In each state that an affiliate nexus style tax has been enacted, remote retailers have terminated contracts with in-state advertisers and contractors to avoid the unconstitutional tax, causing tens of thousands of affiliates to go out-of-business or leave the state entirely. This natural outcome would lead to the collection of little, if any, additional revenue, rendering the law useless.
Even worse, the bill goes beyond implicitly targeting Louisianans to collect more tax revenue. HB 1114 would also require out-of-state companies who invest in a Louisiana business with more than a mere 5 percent ownership stake to collect Louisiana’s taxes. This will undoubtedly deter the flow of investment into the state.
Questions of interstate tax collection fall under the purview of the U.S. Congress, as noted in the Quill case. Louisiana should refrain from enacting a new tax collection obligation on Internet sales in an unconstitutional manner.
Poor enforcement of “use tax” law is no justification for a constitutionally dubious tax increase. We urge you to oppose House Bill 1114 and any attempt to loosen the state’s physical nexus standard for tax collection.
Grover Norquist
Americans for Tax Reform
Duane Parde
National Taxpayers Union
David Williams
Taxpayers Protection Alliance
Kevin Kane
Pelican Institute for Public Policy

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ATR Lends Support to Credit Union Lending Deregulation

Posted by Kaitlyn Ewing on Friday, April 20th, 2012, 3:10 PM PERMALINK

Americans for Tax Reform, along with a number of other free market organizations, recently sent a letter to the Senate leadership urging them to take up S. 2231, the Small Business Lending Enhancement Act. This bill, cosponsored by Senators Mark Udall (D-Colo.) and Rand Paul (R-Ky.) seeks to lift the arbitrary cap placed upon credit unions making it difficult for these institutions to lend to their member businesses. By eliminating the regulations surrounding credit union lending, this would inject over $13 billion into the economy and create up to 140,000 new jobs—just in the first year. The Small Business Lending Enhancement Act seeks to help small businesses who are members of these credit unions get the necessary capital that they may not be able to receive elsewhere. Furthermore, as two of the larger credit unions direct their efforts toward military populations, S. 2231 would greatly help veteran business owners. This bill is a free-market solution to helping small businesses grow and prosper in this tough economy.

View the full letter here.

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Court Halts Internet Tax in Colorado

Posted by Kaitlyn Ewing on Tuesday, April 3rd, 2012, 1:05 PM PERMALINK

On Friday, the U.S. District Court of Colorado entered a permanent injunction against enforcement of an unconstitutional Internet tax measure passed through the Colorado legislature in 2010. H.B. 10-1193 would have required out-of-state, online businesses with no physical presence in the state to report their Colorado consumers to the state Department of Revenue, who could then go after residents for failing to pay their “use tax” on Internet purchases. Direct Marketing Association v. Huber follows the January 2011 granting of a preliminary injunction barring the State of Colorado from enforcing provisions of the law in question.

The law came in response to the U.S. Supreme Court’s ruling in Quill v. North Dakota, which ruled that a lack of a physical nexus in a state exempts an out-of-state retailer from having to collect and pay sales taxes, least it be a violation of the Dormant Commerce Clause. Many states continue trying to force unconstitutional sales tax collection onto online retailers. However, the Colorado law went after Colorado consumers, who owe “use tax” on Internet purchases, but by placing undue and unconstitutional regulations on retailers.

This statute would have established three new, burdensome regulations on out-of-state online retailers who sell products to customers in Colorado. First, the new regulations would have forced such retailers to notify their customers in Colorado that they do not collect a state sales tax, thus making the customer obligated to self-report their purchases and pay use tax to the Colorado Department of Revenue (DOR). The second provision of the law would have made these out-of-state retailers provide their Colorado customers with an annual report of their purchases from the past year, and send to the DOR an Annual Purchase Summary. Finally, it would have mandated that the retailers provide an annual report of each customer, along with their name, billing/shipping addresses, and purchases to the DOR.

In its decision, the Court rightly found that H.B. 10-1193 discriminates against remote sellers in violation of the Commerce Clause of the U.S. Constitution, and imposes an undue burden on these out-of-state retailers. In short, the statute was in violation of Quill.

The decision by the U.S. District Court in Colorado follows a number of other similar state rulings, including a case in North Carolina in which a District Court struck down the law because of First Amendment and privacy concerns in the reporting provisions. Apart from the privacy concerns, the constitutionality concerns, and the undue burden that it places on families and businesses, Internet tax laws pose a severe threat to the physical presence standard, which has long guarded against taxation without representation. Physical presence prevents states from taxing residents in other states and expanding the long arm of the tax collector past the appropriate boundary. It also incents tax competition between states. Data strongly suggests that individuals and families migrate from high tax states to low tax states thanks to stronger economic growth and lower unemployment. Allowing tax collectors to reach across state lines dissolves these borders, diminishing tax competition.

Direct Marketing Association v. Huber is a significant win in the fight to preserve the constitutional physical nexus standard and prevent taxing the borderless marketplace that is the Internet. It is important that more state legislatures stay away from this type of tax in order to ensure future prosperity for its businesses and families.

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Michigan Passes Paycheck Protection for Teachers

Posted by Kaitlyn Ewing on Friday, March 9th, 2012, 3:15 PM PERMALINK

Earlier this week, the Michigan State Legislature passed a bill (HB 4929) which would allow for paycheck protection of public school teachers. Paycheck protection laws prohibit public employee labor organizations from using the dues of their members for political contributions without the consent of their employees. This ensures that all political activity conducted by the union is approved by its members, protecting their basic rights of association. This bill will help to put money back into the pockets of teachers, allowing them the choice as to whether or not they wish to donate to union-sponsored political activity.

A report from the Heritage Foundation shows that paycheck protection legislation has a clear negative effect on public sector union political contributions. Union campaign donations decreased by approximately 50%. These statistics are hard to negate. When given the choice to donate to union-sponsored political activity, much fewer people chose to funnel this money to the union’s political arm showing that many unions are forcing dues-paying members to contribute to causes with which they do not necessarily agree.

There are a number of other bills moving forward in Michigan that seek to enhance worker freedom in the state. HB 5024 would increase penalties for violation of Michigan’s existing mass picketing statute and allow employers to seek legal means to stop disruptive mass picketing. Along these same lines, HB 5023 would increase penalties for illegal public sector strikes, ensuring that public employees are not wasting tax dollars in illegal labor disputes. A third bill, HB 5025 is similar to HB 4929 in that it would allow for paycheck protection to be established, yet this bill would cover all unions, not just teachers’ unions. It would require union leaders to seek annual written consent for dues deductions for purposes other than collective bargaining and grievance adjustments. A final bill, HB 5026 would allow employers to more easily hire new workers, regardless of a labor union dispute. All of these bills passed the House Oversight, Reform, and Ethics committee on January 31 and were delayed at the request of the Leadership until other bills were passed.

Michigan has taken some great steps forward in improving the level of worker freedom in the state. The 2009 Index of Worker Freedom granted Michigan a “D” because of its strong anti-worker policies. It is important that Michigan pass all of the previously mentioned bills, along with further reforms, in order to enhance employee rights in the workplace.

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Internet Taxes Move to the Forefront in a Number of States

Posted by Kaitlyn Ewing on Friday, February 24th, 2012, 1:30 PM PERMALINK

As many states move forward with pro-growth spending and tax reforms, a couple of state legislatures are taking steps in the opposite direction. Legislators in Virginia and Kansas are advancing bills that seek to dissolve the physical nexus standard in their respective states and implement an Internet sales tax on out-of-state companies. This type of tax will not only kill jobs and close down businesses, as it has done in other states, but it is also entirely unconstitutional.

In Kansas, SB 371 moves to push the long arm of the tax collector past its appropriate state boundary and count third-party online advertisers as a physical nexus of the larger companies for which these entities advertise. So, for example, an ad on the Kansas City Star’s website for an online retailer based in California would now mean that retailer has to collect tax in Kansas. Not only does this fly in the face of the U.S. Supreme Court’s Quill v. North Dakota decision, which holds that an out-of-state retailer cannot be forced to collect taxes for the state, but a similar measure is already undergoing a legal challenge in New York. As the history of Internet taxation has shown, these new taxes do nothing to level the playing field with brick-and-mortar businesses, but will put Kansan advertisers out of work and fail to raise revenue for the state. In the states in which an affiliate nexus tax has already been passed, online retailers have terminated contracts with in-state advertisers to avoid this unconstitutional tax, causing tens of thousands of residents to go out-of-business. ATR sent a letter to the Kansas legislature urging them to vote against SB 371. The letter can be found here.

The legislation in Virginia (SB 597) would force out-of-state businesses to notify Virginia residents of their “use tax” obligations, a measure which could also face a legal challenge. A similar reporting requirement law in Colorado recently received a preliminary injunction as it also goes against the precedent set forth in Quill by violating the Commerce Clause. The court’s ruling in Colorado was that the state could not impose any “notice and reporting obligations” on out-of-state companies, particularly when in-state companies do not have these same requirements. Along with the constitutional concerns, the new tax would also deter in-state investment by forcing collection obligations on companies that take even a very small ownership stake of a company in the state. It will encourage remote sellers to expand their operations to other states that do not have similar requirements. Hardly the type of legislation Virginia needs to move forward its economic growth. ATR recently sent a letter to the Virginia legislature urging them to vote against this measure. Click here to read the full text.

A number of other states also have similar legislation moving forward: Minnesota (HF 1849), Maryland (SB 152), Arizona (HB 2804), Mississippi (HB 135), Missouri (HB 1569), and New Jersey (SB 1305). Iowa has a comparable initiative moving forward, and Maryland will be holding a hearing on Internet taxation in the near future. It is important that these state legislatures keep in mind the dubious constitutionality of Internet taxation, as well as the effect that it would have on in-state business.

For an in depth look at the issue, check out a video (below) of ATR’s Kelly William Cobb on an Internet tax panel at the International Students for Liberty Conference held in Washington, D.C. Andrew Moylan of the National Taxpayers’ Union and Joe Henchman of the Tax Foundation were also featured on this panel.

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Two Candidates in Georgia's New 9th Congressional District Sign the Taxpayer Protection Pledge

Posted by Kaitlyn Ewing on Friday, January 13th, 2012, 1:56 PM PERMALINK

Martha Zoller and Doug Collins have become the first and second candidates to sign the Taxpayer Protection Pledge in Georgia’s new 9th Congressional District. This district was added after the 2010 Census and is located in North Georgia. As this is a new district, there will be no incumbent in the 2012 election.

The new district, described by Cook Political Report as being “heavily conservative”, is in the northeast corner of Georgia and is centered in Gainesville. Current Representative of the 9th Congressional District, Republican Tom Graves, will be running in the newly redrawn 14th District. Both Cook and Rothenburg Political Reports have classified the 9th District race as “Solid Republican.”

Four GOP candidates have declared their candidacy in the 9th District, thus far. Other declared candidates include Jackson County Commission Chair Hunter Bicknell and ex-Hall County Chamber of Commerce executive Clifton McDuffie.

By signing the Pledge, these candidates have committed to the taxpayers of Georgia that they will “oppose any and all efforts to increase the marginal income tax rates for individuals and/or businesses … and oppose any net reduction or elimination of deductions and credits, unless matched dollar for dollar by further reducing tax rates.”


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Two More Candidates in Georgia's 12th Congressional District Sign the Taxpayer Protection Pledge

Posted by Kaitlyn Ewing on Thursday, January 12th, 2012, 1:11 PM PERMALINK

Wright McLeod and Lee Anderson have become the second and third candidates to sign the Taxpayer Protection Pledge in Georgia’s newly redrawn 12th Congressional District. The incumbent in this race is John Barrow, a Democrat who won his last election with 56.6% of the vote. With the district recently redrawn, his 2012 race will not be quite so easy.

According to the Cook Political Report, Barrow’s 2010 district voted for Obama by a margin of 55%. Yet in the redrawn district, Obama would have only garnered 44% of the vote. This traditionally “Lean Democratic” district has flipped favorability and is rated by the Cook and Rothenberg Political Reports as “Lean Republican.” By drawing Barrow’s home (in heavily Democratic Savannah) into a neighboring district, Barrow has had to move to remain eligible to run for the seat in the 12th District. This, too, may add to his difficulty of getting re-elected next November.

The Republican-favorable environment in the newly drawn 12th Congressional district has led to five candidates declaring their bids for the Republican nomination next year. One other candidate, Maria Sheffield, has already signed the Taxpayer Protection Pledge. Other declared candidates include construction company owner Rick W. Allen and pro-life activist Brian Nafarrete.

By signing the Pledge, these candidates have committed to the taxpayers of Georgia that they will “oppose any and all efforts to increase the marginal income tax rates for individuals and/or businesses … and oppose any net reduction or elimination of deductions and credits, unless matched dollar for dollar by further reducing tax rates.”

[PDF of McLeod Press Release]

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Sens. Barrasso and DeMint Introduce Pro-Business Regulatory Reforms

Posted by Kaitlyn Ewing on Wednesday, December 14th, 2011, 5:37 PM PERMALINK

Last week, Senators Barrasso (R-Wyo.) and DeMint (R-S.C.) offered legislation which seeks to curb some of the more costly burdens placed on companies through the Sarbanes-Oxley Act of 2002. Their bill, the Startup Expansion and Investment Act, targets Section 404 of Sarbanes-Oxley—a burdensome rule which has greatly increased regulatory compliance costs for many businesses. Rep. Ben Quayle (R-Ariz.) introduced a companion bill in the House earlier this year (H.R. 2941).

While implemented with the intention of securitizing and standardizing accounting measures of publicly traded companies, Section 404 has only led to increased costs for these entities, thus discouraging many small and mid-sized companies from going public. This, then, only allows the largest companies from operating in the public markets, disallowing the smaller firms from expanding and creating jobs. The Senate bill would raise the Section 404 exemption threshold from companies with a worldwide value of $75 million to companies with a worldwide value of $1 billion.

Before Sarbanes-Oxley was enacted, the Securities and Exchange Commission (SEC) stated that the compliance costs of Section 404 would be around $91,000. Yet, in 2009, the SEC conducted a study which found that companies actually spend around $2.3 million on Section 404-related compliance measures. In addition, President Obama’s own Jobs Council found that over the past three years, the number of new startups has decreased by 23%. The regulations enforced by Sarbanes-Oxley are discouraging the expansion of startups, thus inhibiting job growth in this tough economy.

In order to foster in further economic growth and job creation, it is imperative that the Startup Expansion and Investment Act is passed, thus increasing the threshold for Section 404 exemptions. 

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A Step in the Right Direction for Consumer Freedom

Posted by Kaitlyn Ewing on Tuesday, September 20th, 2011, 2:36 PM PERMALINK

As the debate over plastic bags rages on, consumers and common sense managed to pull out a victory in a recent settlement between Hilex Poly, a plastic bag manufacturer, and ChicoBag, an importer of reusable bags. Hilex Poly originally filed a civil suit in response to ChicoBag’s knowing and blatant use of misinformation about ChicoBag’s own product and about the use of plastic bags. ChicoBag’s twisting of numbers and misrepresentation of facts would make former Enron accountants blush. Inaccurate information promoted by ChicoBag included a faux EPA website, fabricated NOAA data, and outdated statistics.

One particularly glaring piece of misinformation that was being spread by ChicoBag stated that “a reusable bag needs only to be used eleven times to have a lower environmental impact than using eleven disposable bags.” This was, in fact, debunked by the UK Environmental Agency, which found that it would take 7.5 years of using the same reusable bag to make it a better choice than a plastic bag reused three times.

Furthermore, ChicoBag failed to mention the negative health effects that reusable bags can have on carriers. Tests on reusable bags were conducted by a Miami news station, finding a reusable bag that carried meat was “covered in bacteria.” A bag that was used to transport produce contained “80 organisms of coliform,” a bacteria that is found in the feces of warm-blooded animals. I’m sure that we can all agree that this is not something we want near the groceries that we’re feeding our families and loved ones.

The settlement that was reached forces ChicoBag to end its use and distribution of inaccurate information—often cited by lobbyists who push local and state legislation that moves to ban and/or tax the use of plastic and paper bags. In order to move forward with a fair and accurate debate over plastic bag use, it is important that the information used to fuel this debate is based on facts and science, not outward propaganda.

Through this settlement, consumers emerge as the real victors. The “science” that has been used to back up the draconian measures that seek to limit consumer choice and manufacture a public health risk has been exposed as fraudulent,  creating the opportunity for a more truthful discussion on plastic bag use. If another statewide bag prohibition or tax is introduced again, as we saw in Oregon this year and California last year, it won’t be so easy for nanny statists to mislead the public about the non-problem they wish to address with the heavy hand of the government.

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Verizon Strikers Sabotaging Wirelines, Disrupting Phone Service

Posted by Kaitlyn Ewing on Monday, August 15th, 2011, 11:13 AM PERMALINK

For approximately a week, 45,000 union employees from Verizon have ganged together to boycott a new contract offered by the company. Under their recently expired contracts, union members at Verizon received $50,000 in benefits per year—more than entire income of the average American working household. The new union contract proposed by Verizon asks employees to make a monthly premium contribution of as little as $100.  This, evidently, has not sat well with union employees who currently pay nothing toward their health care.

The Verizon strike has grown particularly ugly in the past few days. In one Pittsburgh suburb, union members from Verizon have tried to block non-union employees from leaving the company’s offices by using chains and locks to close the exit. In many cities along the east coast, union workers intentionally cut fiber-optic lines, impeding phone, television, and Internet services for many Verizon customers. This behavior is not only juvenile, but extremely dangerous for customers trying to reach fire and police services via telephone.

In addition to this disturbing behavior, many non-union employees have reported union members spitting at them, throwing objects at them, and even engaging in physical altercations with them. In order to deal with this, Verizon had to file a court injunction to prevent the strikers from blocking employees from leaving Verizon offices or otherwise interfering with the company’s business.

The Verizon strike has brought forth a new level of union thuggery. In response to Verizon’s practical request for a small premium contribution toward health care, union workers have taken to engaging in this disgusting behavior, taking for granted the fact that they have a job in this tough economy. With one union worker placing his daughter in front of a non-union worker’s moving truck, it is shocking to see how far these union members will go to get their way.

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