House to Weigh E-Commerce Tax Bill ‘More Thoughtfully,’ Goodlatte Says

Goodlatte said the bill should be further simplified. “There is still not uniformity on definitions and tax rates, so businesses would still be forced to wade through potentially hundreds of tax rates and a host of different tax codes and definitions,” he said. “There is also concern that despite disclaimers[,] the bill could create due process type concerns regarding the ability for affected businesses to sufficiently petition for relief from aggressive state actions and could open the door for states to tax or even regulate beyond their borders.” Goodlatte said he’s open to considering an e-commerce sales tax bill, but it would have to address those concerns. “The Committee will also look at alternatives that could enable states to collect sales tax revenues without opening the door to aggressive state action against out-of-state companies,” he said.

EBay will work with members of the House as the bill goes through “a more traditional legislative process that will allow the shortcomings in the current bill to be addressed,” Senior Director-Global Public Policy Brian Bieron told us. “The contentious debate in the Senate shows that a lot more work needs to be done to get the Internet sales tax issue right, including ensuring that small businesses using the Internet are protected from new burdens that harm their ability to compete and grow,” he said in a statement. EBay will advocate that the bill’s small-seller exemption -- currently $1 million -- be raised to $10 million or 50 employees, he said.

The Senate’s passage of the bill “is an unfortunate misstep that will harm many small Internet and catalog businesses,” said Jerry Cerasale, senior vice president-government affairs for the Direct Marketing Association and co-founder of the True Simplification of Taxation (TruST) coalition. The framework laid out in the bill is “not a sustainable model,” because it “leaves too many important questions unanswered and fails to meet the minimum level of simplification outlined by the TruST coalition,” he said in a statement. The coalition’s recommendations include requiring each state to have a single sales tax rate for remote sales and requiring one nationwide set of definitions regarding taxable and exempt products.

CEA President Gary Shapiro urged the House to pass companion legislation “as quickly as possible.” In a statement, Shapiro said the bill “will modernize how sales taxes are collected, protect states’ rights to make their own policy, bring equality to brick-and-mortar and online retailers, and protect consumers.” Its supporters recognize “that treating all retailers alike is a matter of fundamental fairness and common sense,” he said.

Retail associations applauded the Senate vote. In a statement, National Retail Federation Senior Vice President David French called the bill “a commonsense piece of legislation necessary to modernize and streamline our federal and state understanding of sales tax laws so that they can keep current with real world change in the marketplace.” NRF CEO Matthew Shay said it would “work closely with our bipartisan sponsors in the House … to ensure that efairness is debated honestly and on its merits.” Shay said he believes that, “when brought to a vote … the House will pass the bill and it will be signed into law.” Michael Kercheval, president of the International Council of Shopping Centers, said the bill “creates a fair marketplace that protects retailers, restores the states’ ability to manage their own fiscal policies and strengthens the United States’ free enterprise system.”