The Marketplace Fairness Act, an Internet sales tax proposal that Congress is expected to push by the end of the year, is the "single-biggest anti-taxpayer act in this Congress," National Taxpayers Union president Pete Sepp said in a phone conference Thursday.
The National Taxpayers Union (NTU) commissioned research on the economic impact of the legislation, which would allow states to reach across borders to collect sales tax on items sold to consumers in their respective states.
Existing studies determined that the MFA would impose "measurably heavier state and local sales tax burdens on American households, owing to new business obligations to collect and remit so-called 'remote' purchases," according to the NTU. Under the law, businesses would become agents for states in which they have no voice.
The research found that the tax collection under the MFA's provisions could hit $340 billion by 2024. The average impacted household would pay an additional $360 in state and local taxes in 2015. Typically, far information is requested before a law of such magnitude is passed.
Under current law, Supreme Court rulings held that a state cannot force a business to collect and process sales tax on Internet and catalog purchases when that business has no physical presence within state borders. The MFA would change that, and subsequently open the door to collect taxes from outside state lines. Within state lines, states can already enforce tax from online customers--but most have chosen not to.
Implementation of MFA has implications far beyond current research, including its residual economic impact and the compliance costs for businesses, especially small businesses. It also creates a further burden on businesses, as they have to update websites to calculate and reflect the new taxes and be subject to audit from individual states.
Congress "should not accept an attempt to ram legislation through," Sepp said, and ensure that American families are not shouldered with extra yearly costs.