House Judiciary Committee Chairman Rep. Bob Goodlatte, R-Va., has signaled his support for an Internet sales tax proposal without endorsing the bill passed by the Senate.
Goodlatte released seven "principles on remote sales tax," and it's the second one that suggests he would support an Internet sales tax bill.
"Brick & Mortar, Exclusively Online, and Brick & Click businesses should all be on equal footing," principle two says. "The sales tax compliance burden on online Internet sellers should not be less, but neither should it be greater than that on similarly situated offline businesses."
That principle echoes the argument made by Sen. Michael Enzi, R-Wyo., when he co-sponsored the Marketplace Fairness Act that passed the Senate.
"It’s time to stop discriminating through the tax code and put local and Main Street retailers on a level playing field with their out-of-state and online counterparts," Enzi said.
"The Marketplace Fairness Act does this without raising taxes and without burdening small businesses. It’s time to let states make their own fiscal decisions without having to first ask Washington,” he said.
On the other hand, Goodlatte also issued a "state's rights" principle that champions one of the major criticisms of Enzi's bill. "States should be sovereign within their physical boundaries," principle six says. "In addition, the federal government should not mandate that States impose any sales tax compliance burdens."
When Senate Judicial Committee Chairman Sen. Max Baucus, D-Mont., fought the Enzi Senate bill, he called it "a clear infringement on states' rights that we cannot stand for," according to The Hill.
Goodlatte is opening the process on this legislation carefully. “Americans across the country are affected by the issue of Internet sales tax whether they are consumers or business owners," he said.
"The aim of the principles is to provide a starting point for discussion in the House of Representatives. I greatly look forward to hearing fresh approaches to this issue and continuing the discussion,” he said.
Here are Goodlatte's seven principles:
* Tax Relief – Using the Internet should not create new or discriminatory taxes not faced in the offline world. Nor should any fresh precedent be created for other areas of interstate taxation by States.
* Tech Neutrality – Brick & Mortar, Exclusively Online, and Brick & Click businesses should all be on equal footing. The sales tax compliance burden on online Internet sellers should not be less, but neither should it be greater than that on similarly situated offline businessess.
* No Regulation Without Representation – Those who would bear state taxation, regulation and compliance burdens should have direct recourse to protest unfair, unwise or discriminatory rates and enforcement.
* Simplicity – Governments should not stifle businesses by shifting onerous compliance requirements onto them; laws should be so simple and compliance so inexpensive and reliable as to render a small business exemption unnecessary.
* Tax Competition – Governments should be encouraged to compete with one another to keep tax rates low and American businesses should not be disadvantaged vis-a-vis their foreign competitors.
* States’ Rights – States should be sovereign within their physical boundaries. In addition, the federal government should not mandate that States impose any sales tax compliance burdens.
* Privacy Rights – Sensitive customer data must be protected.