I don't believe it's our job to have to scrutinize each and every bill that moves through congress. We live in a republic and elect representatives to fulfill that task on our behalf. Most of the time that system works, but more and more it seems our representatives are being influenced by special interest instead of their constituents.
H.R 684 is one of those bills that makes me ill. It's sponsors call it the Marketplace Fairness Act of 2013 and it is anything but fair. A month or so ago I received an alert from eBay about this bill. If you have an eBay account you probably did too. They pointed out the implications of H.R. 684 and asked that I sign a on-line petition and contact my Representatives - I did both.
I never heard from my two Senators. Not surprisingly, the Senate passed this bill. I haven't checked to see how Senators Murray and Cantwell voted. Yesterday, I received a response from Cathy McMorris Rodgers thanking me for my concern and well... I posted her e-letter below so you can read it for yourself.
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All in all, it is a very nice letter, after all what wrong with paying sales tax? Right?
Well, nothing except this bill requires citizens to pay 56 billion additional sales tax than they do currently. Proponents argue that citizens should be paying this anyway, suggesting maybe citizens are illegally avoiding paying sales tax. A supreme court ruling (1992 before internet) stated businesses are not required to collect taxes if they do not have a "physical presents" in the state. That law still stands but H.R. 684 will change that. As one citizen stated, our Congress can't get together to pass a budget but they will find ways to add taxes at the drop of a hat.
Not only will this bill take 56 billion dollars out of consumer's pockets but it will add huge overhead through additional regulation to businesses. That cost will be passed on to the consumers as well through higher prices. This bill requires businesses to collect sales tax in every state they sell stuff - regardless of their physical presence.
The bill conveniently overlooks all the problems that will occur by assuring us the federal government will produce (at no charge) software for companies to use. What other problems could there be? Being required to collecting taxes for a state your not associated with is huge. What if there is a dispute about how much taxes you collected? Is that state allowed to audit your books? This bill doesn't really explain how that would work. Or, would it be the federal government that will audit your books to ensure you pay each state their taxes? Either way, this bill grows government and multiplies the burden of doing business by 50 times. Even if you live in a state that doesn't have a sales tax you would be required to collect for all the ones that do.
The bill's preamble reads: "To restore States' sovereign rights to enforce state and local sale and use tax laws, and for other purposes." Since when has the federal government been interested in the states' sovereign rights? This bill only serves to further restrict the freedom of the American economy which is what "for other purposes" must mean.
It is important to recognize who supports this bill and is pushing hard to get it passed. It is large multi-state big box businesses like Target, and the National Retailers Federation (which includes Walmart, Kmart, J.C. Penny Co, Sears, and others.) It is also supported by Amazon the largest online retailer in the world. They already have a presences in most states and accordingly pay sales taxes in those states. So why are they so concerned about online sellers collecting sales tax?
eBay has taken up the cause for small sellers - of whom I am one. There are literally hundreds of thousands of individuals who sell through eBay and other services like etsy.com. These sites and other independent sites sell everything from art and crafts, new stuff and second hand items. eBay alone generates 72.2 billion dollars per year globally. Add in the hundreds of thousands of other small sellers and you can see why the big box stores are interested in getting rid of all these pesky little sellers. I guess getting a bill passed that crushes your competition is what Marketplace Fairness is all about.
In my opinion, this legislation is a first step to marginalize eBay and other online retailers. The next step would be to require eBay along with everyone else to collect taxes on all sales generated. That would end it for most of the little guys and leave the big box retailers a clear playing field.
