Despite protests from trade groups and some state governors, U.S. House of Representatives Speaker John Boehner has remained resolute in his refusal to allow the Marketplace Fairness Act to receive a hearing on the House floor.
Currently, online retailers are not required to collect sales taxes on purchases made from states in which they are not physically located. MFA would require retailers to remit tax revenue to states and other tax jurisdictions regardless of the location of their physical centers of operation.
Boehner has resisted pressure from outgoing Senate Majority Leader Harry Reid (D-NV) and other supporters of the tax measure. In November, Boehner spokesman Kevin Smith told reporters, “The speaker has made clear in the past he has significant concerns about the bill, and it won’t move forward this year.”
Although proponents such as the U.S. Conference of Mayors want the millions of dollars of potential tax revenue that currently escapes their grasp, the rise of e-commerce the current tax freedom allows benefits the economy, Mercatus Center at George Mason University Senior Research Fellow Veronique de Rugy says.
Calling MFA “problematic,” de Rugy cheered its likely demise in this session, saying, “it’s a good thing that they’re not moving forward with it.
“People need to be able to escape the high taxes in their states,” she explained. “Through this exit, people can put some pressure on the jurisdiction they belong to, and try to force them to bring down their tax level. This exit is a force for smaller government, and we should be encouraging it.”
As the 113th United States Congress adjourned before debating MFA, the measure’s supporters will have to resubmit it as a new bill during the next session.
Jesse Hathaway ([email protected]) is managing editor of Budget & Tax News.