Conservatives are all for tax loopholes, except when it comes to internet businesses competing with big-box brick-and-mortar businesses.
Koch-backed groups have banded together alongside the “Alliance for Main Street Fairness” — a retail coalition that includes Walmart — to star in a video showcasing “testimonials” advocating for an across-the-board internet sales tax, according to an article in CPA Practice Advisor. The groups want to convince conservative lawmakers to re-consider passing the Marketplace Fairness Act, which, as a slight of hand, they have termed “e-fairness.” Ironically, 501 (c) 3 and 501 (c) 4’s are both eligible for sales tax exemptions under current federal tax laws.
The Koch-backed organizations make the case — backed with few facts and mostly conjecture — that other taxes will be slashed on the state level if “e-fairness” passes.
“A number of states have indicated that they are willing to cut things like income tax in that state if this act passes and I think that’s a good thing,” claims Nathan Mehrens, President of Americans for Limited Government, a Koch-backed group that co-founded in 1996 by real estate investor Howard Rich, who also has served on the boards of the Cato Institute and the Club for Growth, according to Mother Jones.
“I’ve always been opposed to tax increases. And again, I say to my fellow conservatives, it’s not a tax increase in my mind. It’s a matter of tax equality,” said Jim Martin, Chairman of the 60 Plus Association, a nonprofit think tank that’s supposed to be concentrated on senior issues that received nearly 40 million dollars from the Koch-backed Center to Protect Patient Rights over a three year period.
The federal legislation would make sales tax collection mandatory in every state for all marketplaces doing a million dollars in business every year, which could effect everyone from EBay sellers and Etsy sellers to start-ups and large retailers like Amazon. While most marketplace like Ebay and Amazon would be able to make this across-the-board through complicated transactional software, the end result would be higher costs passed on to consumers.
The Marketplace Fairness Act was proposed and failed shortly after the 2011 election after sweeping Tea Party victories in Congress. It was quickly shot down, however, by online retail giant Jeff Bezos, who argued that requiring internet retailers to navigate the varied rules and rates of more than 7,500 local taxing jurisdictions would be “too burdensome” for most online retailers.