DOJ: News Release

Attorney General Fox and Congressman Daines Brief Congress on Dangers of Internet Sales Tax Bill

Attorney General Fox and Congressman Daines Brief Congress on Dangers of Internet Sales Tax Bill

This morning, Montana Congressman Steve Daines and Attorney General Tim Fox held a briefing on Capitol Hill regarding the Internet sales tax bill, also known as the Marketplace Fairness Act. The bill would force businesses based in states without sales taxes to collect sales taxes from out-of-state purchasers. On March 4, the House Judiciary Committee will hold a hearing on the Internet sales tax issue.

“There is nothing fair about the so-called Marketplace Fairness Act,” Congressman Daines said. “The Internet tax would fundamentally change how online purchases are taxed and would severely undermine Montana’s small businesses. But the Internet tax doesn’t just hurt no-sales tax states like Montana – it hurts small businesses across our country, burdening them with added costs, more paperwork and more senseless regulations. I thank Attorney General Fox for his strong leadership and vigorous work to bring to light the constitutional overreach of this bill, and I remain committed to doing everything I can to stop the Internet tax.”

Last summer, Attorney General Fox formed a bi-partisan, multistate coalition opposing the Internet sales tax bill. Fox, along with Attorneys General Ellen Rosenblum (D-Oregon) and Michael Geraghty (R-Alaska) sent a letter to Congress informing them of legal and Constitutional concerns with the so-called “Marketplace Fairness Act,” which would force businesses in their states to collect sales from out-of-state purchasers. Attorney General Joe Foster (D-New Hampshire) recently joined the coalition.

“Montanans have made it abundantly clear that they do not want a sales tax, and they certainly don’t want to be forced to collect sales taxes for the nearly 10,000 city, county, and state taxing jurisdictions across the country,” Attorney General Fox said. “I’m happy to be working with Congressman Steve Daines as we both continue our efforts to stop this job-killing legislation, which would penalize Montana’s Main Street businesses and create a disincentive for them to expand into out-of-state markets.”

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.

At last summer’s press conference announcing the launch of the multistate coalition, Attorney General Fox was joined by more than a dozen Montana job creators and business owners also urging Congress to kill the online sales tax bill.

At this morning’s briefing, Congressman Daines and Attorney General Fox were joined by Phil Bond, executive director of We R Here, a nationwide coalition of small businesses and entrepreneurs opposed to the Internet sales tax bill. Attendees at the briefing also heard from Andrew Moylan of R Street, who discussed polling indicating 57% of Americans oppose an Internet sales tax.

Attorney General Fox will be providing testimony to the House Judiciary Committee when it meets to discuss the Internet sales tax issue on March 4.

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