GFOA Encourages Members to Lobby Congress on Online Sales Tax Bills

WASHINGTON - The Government Finance Officers Association is encouraging its members to urge their Congress members to support legislation that would allow states to require out-of-state online retailers to collect their sales taxes.

GFOA updated its webpage on Tuesday with new and revised resources on the online sales tax issue in light of the fact that Rep. Jason Chaffetz, R-Utah, introduced legislation on the topic in the House in mid-June, said Emily Brock, senior policy advisor at GFOA's federal liaison center.

It seems like there is momentum on the issue and "we just want to make sure our members have the resources to respond quickly," Brock said.

GFOA has written draft letters that its members can customize and send to their Congress members. One of the draft letters urges House members to support and co-sponsor Chaffetz's bill, called the Remote Transactions Parity Act (H.R. 2775). The other draft letter urges Senators to support and co-sponsor the Marketplace Fairness Act (S. 698).

The two bills are similar in that they have bipartisan support and would allow states to compel retailers to collect sales taxes on online purchases at the rate of the purchaser's state.

The draft letters note that the bills wouldn't impose a new tax, but rather would allow state and local governments to receive tax revenues that they are already owed.

Currently, states can only require retailers to collect their sales taxes if the business has a physical presence in their states, while consumers are supposed to pay use taxes on their purchases from out-of-state online retailers. However, customers rarely pay those taxes, and the requirement to pay them tends not be enforced.

In the letter geared toward House members, GFOA members can provide estimates of the amount of tax revenue that is not being collected in their state or locality because of the lack of federal online sales tax legislation. The members can also explain what services, such as public safety and infrastructure repairs, the lost revenues could have been used to support.

Brock said some of GFOA's members have already sent letters to Congress.

In addition to preparing the draft letters, GFOA has prepared a draft op-ed that calls for House action on online sales tax legislation. The group has also provided talking points that its members can use when they meet with their Congress members, and a fact sheet that counters arguments made by opponents of the MFA.

In 2013, the Senate passed a version of the MFA that is similar to the bill currently pending in that chamber. However, the MFA stalled in the House during the last Congress because House Judiciary Chairman Bob Goodlatte, R-Va., had concerns about it. Earlier this year, Goodlatte released his own draft Internet sales tax bill. It takes a different approach from Chaffetz's bill and the MFA and is disliked by state and local government groups.

House Majority Leader Kevin McCarthy, R-Calif., recently told CQ Roll Call that he wants Chaffetz and Goodlatte to reach an agreement on online sales tax legislation.

For reprint and licensing requests for this article, click here.
Tax
MORE FROM BOND BUYER