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Internet Sales Tax Doomed

12 Nov, 2014 By: Erik Gruenwedel

GOP also opposed to net neutrality

Less than 10 days after midterm elections and the GOP reportedly is on course to deny passage of the “Main Street Fairness Act,” legislation that would mandate state and local tax collection for online services conducting business outside their borders.

With the year-end congressional session beginning this week, proponents of the bill, which had support from the U.S. Chamber of Commerce and major retailers such as Walmart, Target and Best Buy, had sought passage by the House. The Senate passed the bill in 2013.

Opponents say the bill amounts to a new tax on e=commerce — leverage online companies such as Amazon have used successfully to grow market share. Proponents say it’s only fair that online retailers pay the same taxes collected by brick-and-mortar stores, while opponents say the tax laws are too complicated. The bill would exempt small businesses from collecting taxes on their website transactions.

But with the GOP set to take over majority control of both houses of Congress in January, House Speaker John Boehner reiterated his opposition to the Fairness Act.

“The speaker has made clear in the past he has significant concerns about the bill, and it won’t move forward this year,” Kevin Smith, spokesperson for Boehner, told PCWorld.com.

The House in July passed the “Permanent Internet Tax Freedom Act,”  which permanently bans states and local governments from taxing Internet access.

Meanwhile, Boehner voiced his opposition to efforts by the Federal Communications Commission to adopt new net neutrality guidelines.

The Speaker, in a Nov. 10 letter, said passage of net neutrality measures would “undermine a free and open Internet and hurt our economy.” A federal appeals court — citing legal language of the measure — struck down provisions of net neutrality in January following litigation filed by Verizon.

Boehner wrote that President Obama’s Nov. 10 renewed call for net neutrality was a misguided scheme to regulate the Internet and amounted to a “disregard” of the “people’s will,” following the midterm elections. He said net neutrality would be a job killer without giving specifics.

“Federal bureaucrats should not be in the business of regulating the Internet — not now, not ever,” Boehner wrote. “In the new Congress, Republicans will … work to encourage private-sector job creation, starting with many of the House-passed jobs bills that the outgoing Senate majority ignored.”


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