Tuesday, May 21, 2013

Ralph E WallSrAdmin started a new discussion "Congressman Griffith" on Tea Party Command Center

Ralph E WallSrAdmin started the discussion "Congressman Griffith" in the group Commonwealth of Virginia on Tea Party Command Center


Thank you for contacting me regarding the Marketplace Fairness Act (H.R. 684).  I appreciate you taking the time to share your thoughts.


Introduced by Representative Steve Womack (R-AR) on February 14, 2013, H.R. 684 would authorize the states to collect and remit state sales tax on sales to state residents, without regard for the location of the seller.  Importantly, the bill includes an exemption for sellers with gross annual receipts of less than $1,000,000.00 (one million) in remote sales.  In other words, a majority of small businesses and start-ups would not be affected by this legislation.  The person selling a few thousand t-shirts or some antiques or other items would not have to comply.  Also, if a state chooses to participate, and in order to make compliance easier, participating states must make their sales tax systems meet minimum requirements for streamlined return filing, uniform tax base and exemptions throughout the state, and the sales tax rate structure.  H.R. 684 has been referred to the House Judiciary Committee, where it is currently under review.  The Senate passed its version of the Marketplace Fairness Act (S. 743) on May 6, 2013, by a vote of 69-27. 


The truth is  this bill  does not create any new taxes.  H.R. 684 states that "Nothing in this Act shall be construed as... enlarging or reducing State authority to impose such taxes."  The bill does not force any state to participate.  The bill simply empowers the various states to enforce their own state sales taxes. 


In fact, Virginia has had a state sales and use tax since 1966, which requires the customer to pay tax on remote sales.  Remote sales are catalog, telephone, or Internet purchases made by a Virginia resident from a seller in another state.  Compliance with this aspect of Virginia sales tax law is scant because individuals do not know that they are required to fill out the necessary paperwork.  If Virginia's state sales tax policy is your primary concern, I would encourage you to reach out to your state senator and state delegate to share your thoughts with them on that issue. 


Businesses in most states, including Virginia, are already required to charge sales taxes on the goods they sell.  Businesses with a physical connection to Virginia are required to collect these taxes.  This is true even if a consumer orders a product from a web site or catalog business headquartered out-of-state, and the seller has a physical store or warehouse located anywhere in Virginia.  These businesses and small local retail shops are at competitive disadvantage because some large on-line businesses choose not collect the taxes.  Closing this tax loophole for companies with $1,000,000.00 or more in sales will help ensure a level playing field for American businesses, consumers, and retailers. 


America's first Constitution, the Articles of Confederation, governed the United States from 1781-1789.  The Articles of Confederation delegated to the states the power to levy taxes and regulate commerce.  This proved ineffective as states levied taxes on goods from other states, essentially halting interstate commerce.  Mistakes like this in the Articles of Confederation are acknowledged in our current Constitution, which was ratified in 1789.  It begins: "We the People of the United States, in Order to form a  more perfect Union..."  And Article I, Section 8 of the Constitution gives Congress the power "To regulate Commerce with foreign Nations, and among the several States..." 


Whether this bill is the right approach can be debated, but under the Constitution, Congress has a duty to create a system so that states can treat each other fairly regarding interstate commerce.


As an example, right now, because of a lack of enforcement, a Virginian can shop on Main Street for a computer but choose to buy the same $1,000 computer on-line from Montana and save around $50 because the sales tax isn't being collected.  If that same person bought the computer at a Virginia store, the sales tax would have to be paid and collected by the merchant.  We are putting our local businesses – who pay property taxes, hire workers, and sponsor little league teams – at an unfair disadvantage against out-of-state on-line retailers.  The Marketplace Fairness Act levels the playing field by applying the same sales tax rules to every business. For these reasons, I have decided to become a cosponsor of H.R. 684. 


As this bill moves through the legislative process, I will look for ways to strengthen protections and reduce compliance costs for small on-line retailers.  While we may or may not agree on this issue, I look forward to working with you on the many challenges facing our country.

To view this discussion, go to:

To stop following new discussions in this group, go to:

To control which emails you receive on Tea Party Command Center, go to:

No comments:

Post a Comment