Dan Crippen of the National Governors Association Misses the Mark on Online Tax Parity

On March 9, 2015, DAN CRIPPEN of the National Governors Association (NGA) wrote a letter to The Honorable John Boehner, Speaker of the House, U.S. House of Representative.  NGA wants remote sellers to collect sales taxes from customers.

Here is an exert of the letter he sent:

“Under the chairman’s proposal, if a Virginian made an Internet purchase from a California firm, he would pay the tax of the state of origin for his Internet purchase. In other words, he would pay the higher California sales tax (collected by the California seller). Not only would the buyer pay taxes in a state in which he did not receive services and cannot vote (truly taxation without representation), he would see his tax bill go up. And because the higher tax rate would dissuade consumers from purchasing from California companies, those companies would have a strong incentive to move to lower or no–sales tax states, an incentive created by federal law.

In contrast, Congressman Jason Chaffetz has a draft bill that recognizes the consumer as the taxpayer and their home state as the legitimate taxing authority. Under this legislation, if a Virginian made an Internet purchase from a California firm, he would pay Virginia sales tax (also collected by the California seller) just as if he made the same purchase from a local store. This “destination” based system promotes competition by creating a level playing field for local brick-and-mortar stores and their Internet counterparts.”

CRIPPEN endorses Jason Chaffetz’s draft bill BUT he fails to recognize (or decides to ignore) that his argument against the chairman’s proposal also applies to Chaffetz’s draft bill.  Here is an image that proves Chaffetz’s draft bill is “taxation without representation.”


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