Tax Break Nears End For Online Shoppers – Internet Taxation without Representation on Montana’s Small Businesses

Tax Break Nears End For Online Shoppers
Republican Governors, in Need of Revenue, Drop Opposition

BY MONICA LANGLEY

Republican governors, eager for new revenue to ease budget strains, are dropping their longtime opposition to imposing sales taxes on online purchases, a significant political shift that could soon bring an end to tax-free sales on the Internet.

Full Story and Video: http://online.wsj.com/article/SB10001424052702303644004577525070594717752.html

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Wal-Mart Pushes Web Sales Tax as Washington Clout Grows: Retail

In its struggle against surging online retailers such as Amazon.com Inc. (AMZN), Wal-Mart Stores Inc. has unleashed a weapon long shunned by Sam Walton: lobbying.

On July 24, the U.S. House of Representatives Judiciary Committee will hold a hearing on a bill to let states collect sales tax from out-of-state merchants that sell to their residents. If it is passed, online retailers, which now mostly don’t collect sales tax, will lose a price advantage that has helped them take business from brick-and-mortar stores.

By David Welch

Full Story: http://www.bloomberg.com/news/2012-07-20/wal-mart-pushes-web-sales-tax-as-washington-clout-grows-retail.html

Internet Taxation without Representation on Montana’s Small Businesses

Technology, and specifically e-commerce, has allowed remote sellers, such as those located in Montana, to compete on a national and global scale. Based on analysis of state and national data, Montana generated approximately $742 million of retail e-commerce sales for 2011 and approximately $8.4 billion total e-commerce revenue (includes B2B e-commerce across manufacturing, wholesale and selected services as well as retail). Over the past four years, retail e-commerce grew at 8.8%, over seven times the rate of the total retail sector and 8.9% for total e-commerce, nearly five faster than the rate across all sectors.

This entrepreneurial momentum is under threat however by proposed federal bills: The Main Street Fairness Act, The Marketplace Equity Act and The Marketplace Fairness Act. Three bills with similar names, slightly different approaches and political backing, but with one goal: to require out-of-state sellers to charge sales tax on purchases from in-state customers (who reside in states with state or local sales tax). Montana-based companies who sell remotely into other states via the Internet, phone or catalogs, will be impacted by these bills.

Full Report: http://www.matr.net/files/InternetTaxationwithoutRepresentationonMontanaSmallBusinessesFINAL-1.docx

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Internet Taxation: The Prohibitive Costs of Compliance on Small Businesses

Implications of proposed new tax bills

Three competing federal bills were introduced in 2011 that essentially seek the same outcome: to grant states the authority to require remote (out-of-state online, mail and phone) retailers to collect sales and use tax on purchases by in-state customers, regardless of whether or not the seller has a ‘substantial nexus’ or physical presence in the state. States would be required to meet simplification requirements or become full members of the Streamlined Sales and Use Tax Agreement (SSUTA). If given the green light, these current bills could have disastrous ramifications for the Internet economy and in particular, small and medium-sized businesses across the U.S.

Full Position Paper: http://www.matr.net/files/PositionPaper1InternetTaxationComplianceandEnforcementCostsonSmallBusinesses-FINAL.docx