HR 5660, the “Streamlined Sales Tax Bill”
In the hunt for additional tax revenues, a handful of states have again asked Congress to force out-of-state businesses to be their tax collectors. HR 5660, the legislation introduced by Rep. Delahunt, would take money from consumers and move it to two dozen state capitols, but would impose costly new burdens on small businesses in all fifty states. This new collection burden will be a jobs-killer that cannot be justified by the grossly overestimated revenues trumpeted by advocates.
Despite a decade of trying to reduce the unreasonable burdens cited by the Supreme Court, the actual simplification achieved by the Streamlined Sales Tax Project (SSTP) is not nearly sufficient to convince Congress that it should abandon its role in protecting interstate commerce.
Even though sales tax systems are as complex as ever, these states have abandoned their original promise to exempt small businesses and compensate sellers for the burdens of collecting taxes. The proposed legislation once again shows that serious simplification of sales tax systems has become just a slogan — not a standard.
For a decade, the SSTP sought to reduce the burden of sales tax collection on interstate commerce, as held by the Supreme Court’s Quill decision. However, the SSTP is not nearly simple enough. Moreover, recent research proves that the “missed opportunity” for taxation of out-of-state purchases is grossly overstated.
What’s wrong? Privacy legislation that sets information collection defaults will harm the growth of online commerce.
