Montana Attorney General Tim Fox submitted written testimony to this morning’s U.S. House Judiciary Committee hearing on the Internet sales tax issue.
The “Marketplace Fairness Act,” which is one legislative variation of the Internet sales tax, would force Montana businesses collect sales taxes from out-of-state purchasers on behalf of approximately 9,600 taxing jurisdictions throughout the U.S.
“By authorizing the enforcement of state sales tax laws that require remote sales retailers to collect and remit tax proceeds to out-of-state taxing authorities that the retailer has not established ‘minimum contacts’ with, the Act violates the Due Process Clause” of the U.S. Constitution, Fox told members of the House Judiciary Committee this morning. “Aside from the costly Due Process litigation this Act will trigger, requiring small, brick-and-click remote sales retailers to collect and remit sales taxes to upwards of 9,600 taxing jurisdictions will be a costly burden on our small businesses, making it more difficult for them to compete in the market. Given the clear legal and economic pitfalls the Act presents, I strongly urge you to oppose it.” Fox’s full testimony from this morning’s hearing is available here.
Last summer, Attorney General Fox formed a bipartisan, multi-state coalition of attorneys general, which raised legal and constitutional concerns regarding the Internet sales tax bill in a letter sent to every member of Congress. To date, Attorneys General Ellen Rosenblum (D-Oregon), Michael Geraghty (R-Alaska), and Joe Foster (D-New Hampshire) have joined the coalition.
In February, Fox and Montana Congressman Steve Daines held a briefing on Capitol Hill, where they discussed the dangers that the Internet sales tax bill poses to Montana’s small businesses.
“Montanans have made it abundantly clear that they do not want a sales tax, and they certainly don’t want to be forced to collect sales taxes for the nearly 10,000 city, county, and state taxing jurisdictions across the country,” Fox told attendees of the February 27 briefing. “I’m happy to be working with Congressman Steve Daines as we continue our efforts to stop this job-killing legislation, which would penalize Montana’s Main Street businesses and create a disincentive for them to expand into out-of-state markets.”