WASHINGTON — More than 1,000 small business owners from across the country are urging House Judiciary Committee Chairman Bob Goodlatte, R-Va. to pursue online sales tax legislation.
"We believe now is the time to move forward with legislation that will level the playing field for all retailers," the business owners wrote in a letter, which comes as Goodlatte's committee prepares to hold a hearing about Internet sales taxes on Wednesday.
Currently, states cannot require businesses that lack a physical presence in their borders to collect their sales taxes. In December, the Supreme Court declined to hear challenges to a New York internet sales tax law, leaving the online sales tax issue for Congress to handle.
The business owners said in their letter that they want the "online sales tax loophole" closed because it hurts community-based businesses.
"As small-business owners, we embrace competition and the challenge of attracting customers in the digital age, but we ask that Congress end the tax advantage currently afforded our online competitors.
Let us compete on true price, service, and selection without government's thumb on the scale," said the letter, which contained the logos of the Marketplace Fairness Coalition and the Alliance for Main Street Fairness.. "It's time to update our sales tax laws to reflect the economic and technological realities of the 21st century."
Last May, the Senate passed the Marketplace Fairness Act, which would allow states to compel remote sellers to collect sales tax if the states simplify their sales tax laws. But Goodlatte had issues with the bill, and it stalled in the House.
"While we understand your desire to pursue alternative ideas, we hope that the House of
Representatives and your committee will move quickly and judiciously in 2014 to level the retail playing field," the small business owners told Goodlatte. "True free market competition will not only support America's local businesses, but will strengthen our economy and provide lower taxes for everyone."
Wednesday's congressional hearing, titled "Exploring Alternative Solutions on the Internet Sales Tax Issue," will examine several proposed internet sales tax solutions. The witnesses will present their proposals and defend them against criticisms from the other panelists, according to a release from the committee.
The ideas in the proposals are in response to the seven principles on Internet sales taxes that Goodlatte called for in September: tax relief, tech neutrality, no regulation without representation, simplicity, tax competition, states' rights and privacy rights.
