Hot new national security priority: taxing Internet sales
Yes, according to rumblings on Capitol Hill, Sen. Dick Durbin, D-Ill., will once again attempt to attach the Reid-Durbin-Obama Internet sales tax bill known as the Marketplace Fairness Act to completely unrelated legislation. This time around, rumor has it that he will attempt to move the bill as an amendment to this year’s National Defense Authorization Act, the bill laying out our nation’s defense priorities and basic funding levels. Though he was rebuffed, he attempted the same tactic on last year’s defense bill.
The MFA would empower states to impose their sales taxes on any business, regardless of physical presence, for sales made remotely (the vast majority of which is over the Internet, but also encompasses catalog sales). As I’ve written many times before, this legislation is terrible policy, terrible politics (particularly for conservatives), and has serious constitutional questions associated with it that have not been answered.
After failing to attach MFA to last year’s defense bill, Durbin eventually convinced Senate Majority Leader Harry Reid, D-Nev., to bypass regular order entirely in order to push the bill to the floor without the input of the pesky Finance Committee, which might have asked uncomfortable questions like, “does this bill violate due process by empowering states to impose collection burdens on businesses with no physical presence inside their borders?” or “does this bill violate the Interstate Commerce clause by imposing substantial compliance burdens on sales across state lines?”
Thankfully, the House of Representatives has taken a much more deliberate and reasonable course. In September, Rep. Bob Goodlatte, R-Va., chairman of the House Judiciary Committee, released a white paper called Basic Principles on Remote Sales Tax, which laid out the most important issues from his perspective. They made clear that the House is taking seriously a contemplative process on the legislation, the likes of which the Senate studiously avoided at every turn.
Hopefully, Durbin’s latest gambit fails. If it wasn’t shameful enough to try subvert regular order to pass a likely unconstitutional Internet sales tax bill, surely trying to attach that same bill to the legislation meant to provide for our nation’s defense (Congress’ most important constitutional duty) is a bridge too far. The Senate would be wise to reject his attempt, then promptly repent and join the 57 percent of Americans that oppose this bill (including 65.6 percent of Republicans, 56.1 percent of independents, and 47.9% of Democrats) in saying “no thanks” to misguided Internet sales tax legislation.