Internet Sales Tax Would Kill Small Business
Catesby Jones is a small business owner who is sharing his story and telling us why he is so concerned about the Internet sales tax. Jones owns a company called Peace Frogs that is based in Virginia. But it is the Internet that makes his business possible. He calls the Internet sales tax “an attack on small businesses like mine.”
We have made several arguments against the Internet sales tax. Small businesses would have to comply with America’s 9,646 different taxing jurisdictions and to collect and remit taxes in 46 states. Small businesses like Peace Frogs do not have the administrative resources to comply with these burdensome regulations.
This tax would also undermine the principle of federalism and would grant states the authority to force online retailers (with online sales over $1 million per year) to collect sales taxes for states in which they have no physical presence. Heritage explains:
Abandoning the physical presence standard would be an egregious violation of basic principles of federalism, because it would allow states to expand their power to tax and to regulate beyond their borders.
Jones and other small business owners who depend on the Internet for their success will be harmed by the Internet sales tax. This bill — though it is called the Marketplace Fairness Act — is anything but fair.