Last week Senate Majority Leader Harry Reid successfully pushed to the Senate floor a major online tax bill originally titled the Marketplace Fairness Act, bypassing the committee process. The proposal, which passed the Senate with a vote of 69 to 24, expands the ability of state governments to force out-of-state retailers to collect sales taxes for online and mail-order sales, even if the seller has no physical presence in the state.
If the bill passes the House and is signed by President Obama, it would give states a vast new power over retailers outside their borders, including the imposition of auditing requirements. States would be allowed to create their own unique definitions of how and when items are taxed, increasing confusion for out-of-state sellers.
Proponents of the bill have recently begun an effort to sway Republican votes by distributing material outlining support of the bill from several conservative legislators and commentators. In fact, outside of a small group of conservative legislators, the majority of support for the Marketplace Fairness Act comes primarily from legislators seeking new tax revenue or interest groups using the government to undermine their competition by imposing a tax on their online competitors.
The Marketplace Fairness Act violates the key tax principle requiring a physical presence to impose a tax and is inconsistent with conservative tax values.
The Heartland Institute has compiled a list of legislators, journalists, and think tank leaders across the conservative and libertarian spectrum that strongly oppose the Marketplace Fairness Act. It is available online here: http://heartland.org/no-net-tax.