It also subjects all sellers on an “electronic marketplace” like eBay or Amazon to its requirements,no matter their sales volume. As a result, the RTPA would ensnare dramatically more businesses in burdensome collection schemes than the misguided MFA.
The legislation is also problematic in its increased reliance on so-called “certified software providers” to function as tax-collection agents for states. These software providers constitute an ostensibly private, but state-paid, “middle man” between tax agencies and sellers in whom most collection and audit responsibilities are vested.
While it theoretically protects businesses below a $5 million sales threshold from out-of-state audits,
the language contains an enormous loophole empowering any state to audit any remote seller if it believes there is “intentional misrepresentation.” Aggressive states undoubtedly would seize upon this opening to audit businesses outside their borders.
In seeking to address the failures of the “use tax” systems employed by states, the RTPA ends up blessing a massive expansion in state tax-collection authority and dismantling a vital taxpayer protection upon which virtually all tax systems are based. This will harm online sales, which–despite their dramatic expansion–still only account for roughly $0.07 of every $1 in retail spending. Conservatives in Congress should oppose this unwise legislation and instead work to preserve geographical limits to tax authority and to encourage tax competition.
Andrew Moylan, R Street Institute
Matt Kibbe, Freedom Works
Phil Kerpen, American Commitment
Luke Kenworthy,Generation Opportunity
Brent Wm. Gardner, Americans for Prosperity
Michael Needham, Heritage Action for America
Grover Norquist, Americans for Tax Reform
Joe Bast,Heartland Institute
John Tate, Campaign for Liberty
Tom Giovanetti, Institute for Policy Innovation
Tom Schatz, Council for Citizens Against Government Waste
Seton Motley, Less Government
Andrew F. Quinlan, Center for Freedom and Prosperity
Pete Sepp, National Taxpayers Union
Jeff Mazzella, Center for Individual Freedom
Paul Gessing, Rio Grande Foundation
Wayne Crews, Competitive Enterprise Institute
David Williams,Taxpayers Protection Alliance
Katie McAuliffe, Digital Liberty