The Georgia Retail Association sent out a statement recently, picked up by our friends at the AJC’s Political Insider, in which they defended David Perdue’s support of an Internet sales tax and expressed hope that other Senate candidates would back a proposal currently stalled in Congress:
The Georgia Retail Association, the trade group that represents local retailers throughout the state, today condemned false attacks made by the SuperPAC Southern Conservatives Fund against Senate candidate David Perdue for his position in favor of the Mainstreet Fairness Act.
“We hope that all the candidates in the Georgia Senate race will show their support for Georgia’s retailers and condemn the false attacks by the SuperPAC.
Out-of-state, Internet-only businesses want you to believe Mainstreet Fairness is a tax increase, and that is just not true. It’s about helping small businesses compete in a free and fair market,” said Rick McAllister, president of the Georgia Retail Association.
“Big online retailers are putting Georgia retailers out of business by avoiding sales tax collection. The Mainstreet Fairness Act will level the playing field for Georgia retailers by requiring those out of state companies with no jobs in Georgia to play by the same rules,” McAllister said.
First, the Georgia Retail Association got the name of the bill wrong in its statement to the press. The measure’s Orwellian-sounding name is the “Marketplace Fairness Act,” unless, of course, there’s another Internet tax proposal that’s circulating around Congress, and given that this particular bill has passed the Senate and is currently stalled in the House Judiciary Committee, one would surmise that this is the bill GRA meant to reference.
Second, this bill is terrible. It has nothing to do with “helping small businesses compete in a free and fair market.” After all, there is nothing “free market” about this measure. The Marketplace Fairness Act is protectionist in nature, meant to quash online retailers in favor of traditional, brick-and-mortar retailers.
Third, this measure would bring a heavy regulatory compliance burden on online retailers, which would almost certainly be passed onto consumers, as Jacob Sullum explained at Reason in May 2013 (emphasis added):
[C]ompanies with customers throughout the country are understandably worried about complying with the multifarious demands of the 9,000 or so jurisdictions that have the authority to impose sales taxes. That burden is less daunting to big companies like Amazon (which might even be said to enjoy an unfair advantage in that respect) than to their smaller competitors. In partial recognition of that reality, the Marketplace Fairness Act exempts merchants with less than $1 million in annual out-of-state revenue.
The bill seeks to reduce the compliance burden by requiring each state to offer free software allowing merchants to calculate sales tax and file a single return for all taxing authorities within the state. States could not audit a business more than once a year.
Still, that’s 46 returns (45 states with sales taxes plus the District of Columbia), which have to be filed monthly or quarterly, and 46 potential audits every year, not to mention all the misunderstandings, disputes, and hassles that fall short of an audit. You can start to see why the Supreme Court deemed collection of sales taxes from remote vendors an unconstitutional burden on interstate commerce.
The so-called “Marketplace Fairness Act” is cronyism at its worst, and David Perdue is totally down with it.