OP-ED CONTRIBUTOR

The Lame Duck Is No Time to Cripple Internet Commerce

Online and catalog retailers around the country have made it clear to Congress that a radical remote sales tax mandate would cause severe hardships for their businesses and consumers across the United States.

As we enter the “lame duck,” the post-election session of this Congress, we are likely to see an effort to pass the Marketplace Fairness Act, even though this bill has not been on the floor of the House or Senate and has never even had a committee hearing.  Our leaders in Congress should resist any effort to move MFA in the lame duck or attach it to must-pass legislation.

The MFA would impose massive logistical burdens, new costs and uncertainty on online and catalog retailers by requiring each business to collect sales tax on remote transactions and comply with over 10,000 local tax jurisdictions and 46 state auditors.

Senate Majority Leader Mitch McConnell (R-Ky.) earlier this year recognized the deep disagreements over MFA and disentangled it from other must-pass legislation. But McConnell indicated he would bring internet sales tax legislation up for a vote “sometime this year.” With the year’s end fast approaching, we urge the Senate leader to resist supporters of MFA wanting to turn his declaration into a disaster for all American retailers who sell online.

Forcing small and mid-sized internet and catalog retailers to navigate the vagaries of thousands of arcane tax jurisdictions, including varying definitions and sales tax holidays, could lead many to stop selling in some states. That would reduce consumer choice and competition.

Additionally, remote retailers would be on the hook to shoulder hundreds of thousands of dollars in costs for software integration and annual software maintenance. MFA would allow each state to provide its own unique software for compliance, but each business would have to pay to integrate that “free” software into its ordering, fulfillment and accounting systems. And each remote business would be required to incur substantial new labor expenses to map thousands of products to each states’ rules.

Perhaps most significantly, MFA would subject remote sellers to tax audits and administrative jurisdiction by up to 46 states where they have no physical presence. This is taxation and regulation without representation and is counter to our nation’s principles.

Members of Congress should also be troubled that MFA has never had a hearing or been approved by any committee.  Moreover, far better alternatives to MFA have emerged. House Judiciary Committee Chairman Bob Goodlatte (R-Va.) is working on the Online Sales Simplification Act, a simple and fair alternative that lets remote sellers follow tax rules and face audits only in states where they have a physical presence.  As soon as it was published in draft, over 100 retailers and associations signed a letter of support.

Rather than jamming flawed legislation like MFA through the lame duck, we urge Congress to fully consider alternatives such as the House Judiciary Committee proposal. While remote sellers want a clear federal solution to a rash of state laws that would shred constitutional protections for interstate commerce, the answer is definitely not MFA. That bill would only reduce competition from online and catalog businesses and create big burdens on retailers with no representation in the states that seek to tax and regulate them.

 

Steve DelBianco is Executive Director of NetChoice, a trade association that represents online retailers and e-commerce companies.

Morning Consult welcomes op-ed submissions on policy, politics and business strategy in our coverage areas. Submission guidelines can be found here.

Briefings

Tech Brief: SEC Reveals It Was Hacked Last Year

The Securities and Exchange Commission said a computer system used for storing documents filed by publicly traded companies had been hacked last year. The cyberattack was first detected by the regulator last year, but the SEC said it had learned only last month that the compromised information may have been used in illegal stock trades.

Tech Brief: 3 House Democrats Call for FCC Investigation of Sputnik

Three Democratic members of the House Energy and Commerce Committee called on the Federal Communications Commission to investigate whether Sputnik, a news organization established by a Russian state-owned news agency, violated the public interest standard of its broadcast license with its radio show. Reps. Anna Eshoo (Calif.), Frank Pallone Jr. (N.J.) and Mike Doyle (Pa.) asked FCC Chairman Ajit Pai to follow up on a New York Times Magazine report that suggested the organization used U.S. airwaves to broadcast programming aimed at influencing the outcome of the 2016 U.S. presidential election.

Tech Brief: FCC Requests More Information on Sinclair-Tribune Merger

The Federal Communications Commission asked Sinclair Broadcast Group to provide more information on its proposal to acquire Tribune Media Co., a merger currently pending FCC approval. The FCC’s Media Bureau chief wrote a letter to Sinclair asking the telecommunications company to present further information about the size of its current audience, as well as the steps the company plans to take to stay below the ownership cap.

Tech Brief: Kaspersky Agrees to Testify Before House Committee

The House Science, Space and Technology Committee invited Kaspersky Lab Inc. co-founder and CEO Eugene Kaspersky to testify, along with other private and U.S. government cybersecurity experts, before the panel on Sept. 27, and he accepted the invitation — pending the acquisition of an expedited visa. The Moscow-based company, which makes antivirus software, is on the defensive from allegations it aids Russian espionage efforts.

Tech Brief: Judges Rule Uber-Waymo Case Will Go to Trial, Not Arbitration

A panel for the U.S. Court of Appeals for the Federal Circuit denied Uber Technologies Inc.’s appeal request for its legal dispute with Waymo LLC to move to private arbitration and ruled a public trial will proceed as scheduled in October. The court also ruled that Uber must hand over a crucial report for Waymo’s case that could hold evidence Uber stole trade secrets related to the development of self-driving cars.

Tech Brief: House Democrats Request Answers From Equifax on Data Breach

Led by Rep. Frank Pallone Jr. (D-N.J.), all 24 Democrats on the House Energy and Commerce Committee sent a letter to Equifax Inc. CEO Richard Smith expressing concerns that it took more than a month for the company to reveal the massive data breach it said took place from mid-May through July, and about the scale and extent of the breach. The signers asked Smith to address these concerns prior to a planned hearing on the issue.

Tech Brief: Apple Expected to Unveil Premium Model ‘iPhone X’ Today

Apple Inc. plans to premiere the so-called iPhone X with a starting price of $999.00 at a 10th anniversary iPhone event on Tuesday, joining Samsung Electronics Co. Ltd in the market for luxury smartphones. In addition to the iPhone X, which uses infrared facial recognition to unlock the device, Apple is also expected to release cheaper models of the iPhone and an updated Apple Watch, with self-contained connect

Tech Brief: Two House Committees Call Hearings on Equifax Data Breach

Equifax Ltd. could be examined by up to three committees in the U.S. House of Representatives after a breach at the company exposed the data of roughly 143 million people. Chairman Jeb Hensarling (R-Texas) of the Financial Services Committee and Chairman Greg Walden (R-Ore.) of the Energy and Commerce Committee announced hearings, and Rep. Ted Lieu (D-Calif.) called for an investigation by the Judiciary Committee.

Load More