Heartland Institute Experts React to Senate Debate of Marketplace Fairness Act

Published April 18, 2013

This week Senate Majority Leader Harry Reid (D-Nevada) began the process of pushing the Marketplace Fairness Act before the full Senate and bypassing the Senate Finance Committee.

The following statements from tax and digital economy experts at The Heartland Institute – a free-market think tank – may be used for attribution. For more comments, refer to the contact information below. To book a Heartland guest on your program, please contact Director of Communications Jim Lakely at [email protected] and 312/377-4000 or (cell) 312/731-9364.

“This piece of legislation represents a vast expansion of state taxing powers. If the supporters of this bill want to hide behind a ‘state’s rights’ argument, they need to justify how one state can charge sales taxes to a resident of another state, a state where they have no political voice and from which they receive no government benefits or services.

“The nexus standard that disallows state governments from forcing a tax on a company without the company having a physical presence in the state is an important taxpayer protection that has been repeatedly upheld in the U.S. Supreme Court. This standard protects us from an abuse that Americans have fought against since our nation’s inception: taxation without representation.”

Matthew Glans
Senior Policy Analyst
The Heartland Institute
[email protected]

“This is another inroad of the government into our lives in a way that is sure to reduce commerce as tens of billions of dollars are siphoned from shoppers to state and local governments. True marketplace fairness would require every brick-and-mortar store to verify the address of each and every one of its shoppers, determine what the sales tax is where each shopper lives, and then send that money to each shopper’s local taxing jurisdiction. Under this bill, only online and mail-order retailers will have to do that.”

Steve Stanek
Research Fellow, Budget and Tax Policy
The Heartland Institute
Managing Editor
Budget & Tax News
[email protected]

“The so-called Marketplace Fairness Act is a massive expansion of taxing authority that could open the door to a Pandora ‘s Box of other new taxes. By gutting the physical presence standard and as a result tax competition among the states, this proposal would drive up taxes on everyone.

“This would create two different tax systems for sales by forcing online or mail order businesses to collect sales taxes where the customer is located rather than where the actual business is located, while brick-and-mortar stores will continue to enjoy collecting based on the location of their business. If you believe that our government needs to open up taxation powers and tax consumers even more then this is the proposal for you.”

John Nothdurft
Director of Government Relations
The Heartland Institute
[email protected]

The Heartland Institute is a 29-year-old national nonprofit organization headquartered in Chicago, Illinois. Its mission is to discover, develop, and promote free-market solutions to social and economic problems. For more information, visit our Web site or call 312/377-4000.