Attorney General Fox Forms Bipartisan, Multi-state Coalition Opposing Online Sales Tax Bill
At a press conference today, Attorney General Tim Fox announced his office has spearheaded the formation of a coalition with other state attorneys general to oppose a bill in Congress that will force Montana businesses to collect the sales taxes of other states, counties and cities. The coalition has begun legal research on the constitutional problems with the bill that could be used in a potential challenge against the law if Congress and President Obama enact it (read the coalition’s letter to members of Congress outlining legal concerns with the bill).
Montana is teaming up with the Attorneys General Ellen Rosenblum (D-Oregon) and Michael Geraghty (R-Alaska). Both Oregon and Alaska do not have statewide general sales taxes.
“Montanans have rejected a sales tax several times, and they certainly don’t want to be forced to collect the sales taxes of 9,600 cities, counties and states,” said Attorney General Tim Fox.
The so-called “Marketplace Fairness Act” would require any Montana-based business that sells products via the internet to collect sales taxes from out-of-state customers. The bill has passed the U.S. Senate and awaits action in the U.S. House of Representatives. President Barack Obama has indicated he would sign the bill if it gets to his desk. Several Montana businesses have been working with Attorney General Fox after expressing their strong opposition to the bill.
“We fully support Attorney General Fox in opposing the internet sales tax,” said Lance Trebesch, CEO and Co-Owner of TicketPrinting.com, a small business based in Harlowton and Bozeman. “This legislation will severely hurt innovative small businesses like ours that have developed markets beyond their regions and force them to become tax collectors for over 9,600 cities, counties, and states with zero enforcement and audit protections for their businesses. This bill is a gateway tax for taxing everything (goods, services, communications) over the internet and for enabling states to extend their regulatory regimes to remote entities anywhere.”
Since Montana, Oregon and Alaska have continually voted down statewide sales taxes, this tax-collecting burden would hamstring businesses with a significant new regulation and without any benefit to states without general sales taxes. Delaware, Alaska, Oregon and New Hampshire are the other four states without a general sales tax.
“We appreciate Attorney General Tim Fox standing up for Montana business on this issue,” said Webb Brown, President/CEO of the Montana Chamber of Commerce. “Our members would get no benefit from being the tax collector for nearly 10,000 taxing jurisdictions. There’s nothing fair about the Marketplace Fairness Act.”
In the past, the courts have rejected efforts to impose broader taxing responsibilities on companies that do not operate within a state because of the Commerce and Due Process Clauses in the U.S. Constitution. If a business is not physically present in the taxing jurisdiction, or it does not have sufficient contacts with the taxing jurisdiction, courts have been reluctant to impose tax collecting duties on those companies.
“When I was elected, I pledged to stand up for Montana’s interests whenever Washington, D.C., crossed the line,” explained Attorney General Fox. “This job-killing bill essentially establishes taxation without representation, penalizes our Main Street businesses, and creates a disincentive for our entrepreneurs to expand into new markets outside of Montana.”
Joining Attorney General Fox at the press conference today:
- Webb Brown, CEO/President of the Montana Chamber of Commerce
- Lance Trebesch, CEO/Owner of Ticket River & TicketPrinting.com (Harlowton and Bozeman)
- Colleen Rast, CEO/Owner of Great Sky Gifts (Kalispell)
- Jon Edwards, Owner/CEO of Schnees (Bozeman)
- Jeff Batton, CEO of Natural Baby Company (Bozeman)
- Tim Ludicello, CEO/Owner of Botanie Soap (Missoula)
- Jim Markel, CEO/Owner of RedOxx (Billings)
- Andrew Field, CEO of Printing for Less, Dan Rice, VP of Corporate Affairs (Livingston)
- Alicia Moe, Owner of Cream of the West (Harlowton)
- Sarah Calhoun, CEO/Owner of Red Ants Pants (White Sulphur Springs)
- Josh Spitzer, CEO of Schedulicity (Bozeman)