Tester pushes back against online sales tax proposal

By Martin Kidston/Missoula Current

Sen. Jon Tester is asking the president and leaders in Congress to reject a bill that would establish an online sales tax, one that Montana opponents say would place the state’s small businesses at an economic disadvantage and make them vulnerable to distant tax collectors.

The bill, dubbed the Marketplace Fairness Act of 2017, would require small businesses that sell products or services online to collect a sales tax from nearly 10,000 other taxing jurisdictions.

Tester said the measure would hurt small businesses across the country, including those in Montana.

“I do not believe it is fair to ask businesses in my state to purchase and implement costly software to help remit taxes to nearly 10,000 different tax jurisdictions across the U.S.,” Tester said. “Congress should be championing policies that allow for growth and create jobs, not impose more taxes.”

Tester voiced his concerns in a May 5 letter to President Donald Trump, and Republican leadership in both the House and Senate. The bill was introduced by Mike Enzi, R-Wyoming, Dick Durbin, D-Illinois, Lamar Alexander, R-Tennessee and Heidi Heitkamp, D-North Dakota.

Under the proposal, the act would require small businesses to collect a sales tax on behalf of other states and local governments when selling online goods. The businesses would then be require to remit the taxes to the appropriate jurisdiction – wherever the customer resides.

Tester said the bill also opens the door for other state and local governments to summon small businesses from Montana to their jurisdictions for unnecessary audits.

“This legislation does not provide adequate safeguards for small businesses in states with no sales tax,” Tester said. “I remain concerned that (the act) does nothing to prevent my state’s small business from being summoned to the states for expensive and unnecessary audit proceedings.”

Enzi, one of the measure’s sponsors, said his measure would support jobs and services and enable states to collect owed taxes.

“Right now, thousands of local brick-and-mortar businesses are forced to do business at a competitive disadvantage because they have to collect sales and use taxes and remote sellers do not,” Enzi said. “This legislation promotes internet fairness by putting Main Street businesses on a level playing field with online retailers.”