Internet Taxation without Representation on Montana’s Small Businesses

Montana Business Owners,

This is a time-urgent notice. For businesses with internet sales channels and internet businesses, there is pending internet sales tax legislation the U.S. Senate which will force Montana small businesses to become tax collectors for over 50 states and over 9,600 sales tax jurisdictions across the U.S.

You will be forced to assess the right tax (over 9,600 different rates), charge the tax to your out of state customer, and then remit the taxes for every transaction. You will then be subject to audits each year.

Make no mistake, this is a ‘gateway tax’. Many states have made it their goal to collect taxes on all internet activities, from internet services to digital goods. This is just the first step.

Obviously this will hurt small business growth and jobs just when we need them most. Second, this in effect taxes our pioneering innovation, as hundreds of Montana small businesses have built robust internet sales channels and internet businesses over the past two decades.

Lastly, it’s a dangerous and completely unprecedented overreach by states to impose their tax and regulations anywhere even in Montana, a state with no sales tax.

If you are against this, please write Senator Max Baucus [email protected] by end of day today and tell him why you are adamantly opposed to internet taxation. For more information, this whitepaper details why this will adversely affect Montana small businesses.

Position Summary

The three Federal bills (the Main Street Fairness Act of 2011 S. 1452/H.R. 2701, Marketplace Equity Act of 2011 H.R. 3179 and Marketplace Fairness Act of 2011 S. 1832) currently under consideration by Congress and the Senate, should not be enacted in any form because they could have a devastating impact on the U.S. economy that will reverberate down to all states, including non-sales tax states such as Montana.

* The prohibitive cost and complexity of compliance may force many small online businesses to downsize or close, thereby accelerating further consolidation of large offline and online retailers

* The bills will stifle innovation, competition and economic growth, at a time when the economy is struggling to recover

* Consumers will be hit hard: they will ultimately foot the bill for these taxes and will face higher prices and less choice with market consolidation

Secondly, all non-sales tax states, such as Montana should be exempt from any remote sales tax legislation as they would bear the prohibitive cost of compliance with no benefits returning to the state. This also goes against the principle of representation through taxation.

Finally, in support of entrepreneurs across the U.S., any small business definition should be consistent with industry standards. The Small Business Administration defines retail non-store ‘electronic shopping’ (NAICS code: 454111) small businesses as those with a maximum of $30 million in annual receipts. As these types of remote retailers are prime targets for these bills, $30 million should be the small seller exemption threshold for any federal or state tax legislation.

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