by Naomi Jagoda
March 13, 2018
GOP Sens. Steve Daines (Mont.) and Ted Cruz (Texas) on Tuesday urged their fellow lawmakers not to add online sales tax legislation to an omnibus spending bill, arguing that doing so would hurt small businesses.
“Omnibus can mean ominous for taxpayers,” Daines said at a press conference.
Some lawmakers on both sides of the aisle are pushing for the omnibus to include legislation to allow states to require out-of-state online retailers to collect their sales taxes. Rep. Kristi Noem (R-S.D.) has been making an aggressive push on her bill on the subject in the House.
Supporters of the legislation argue that it will allow states to collect money already owed to them and put online retailers on the same playing field as brick-and-mortar stores. They also argue that there’s urgency for Congress to act now, before the Supreme Court acts on a case on the topic this year.
But Cruz, Daines and other conservatives argue that legislation like Noem’s would be detrimental to small online retailers.
“The internet sales tax would take small mom-and-pop internet sellers all across the country and subject them to the taxing authority and to the enforcement authority of over 9,600 jurisdictions all across the country,” Cruz said.
The senators, as well as representatives from outside conservative groups, argued that online sales tax legislation is opposed by the public and should go through the regular legislative process. They also said that Congress shouldn’t act before the Supreme Court rules.
“Congress could legislate in a way that’s not actually responsive to what the court might do,” said Andrew Moylan, executive vice president of the National Taxpayers Union Foundation.
In addition to conservatives, Democrats in states without sales taxes also oppose inclusion of online sales tax legislation in the omnibus.
“If passed, this would create an underground, nationwide, privatized tax-collecting bureaucracy,” Sen. Ron Wyden (D-Ore.) said in a statement last week.