Marketplace Fairness Act foes hopeful House Judiciary develops ‘origin sourcing’ alternative
Opponents of the Marketplace Fairness Act are hopeful that the House Judiciary Committee will introduce an alternative online sales tax bill would tax online retailers based on their location but lets states redistribute those taxes based on the location of the purchaser, said experts in interviews. The latter method, known as “origin sourcing,” doesn’t have unanimous consensus among conservative groups opposed to the MFA, but many see it as useful compromise, said R Street Institute Executive Director Andrew Moylan. Some anti-MFA groups are still developing a position on origin sourcing, he said. The committee’s attention to immigration, patent and copyright issues has put online sales tax issues on the back burner, said the experts.
…MFA is “bad news for conservative principles and the cause of limited government,” said a letter from a coalition of conservative groups sent to the Senate Thursday. The organizations included Americans for Tax Reform, Heritage Action for America, the National Taxpayers Union and R Street Institute. MFA would “dismantle proper limits on state tax collection authority while causing serious damage to electronic and interstate commerce,” they said. “Conservatives in Congress should oppose this unwise legislation and instead pursue thoughtful alternatives that preserve geographical limits to tax authority and encourage tax competition.” Any “reform” of the online sales tax regime would “have to preserve the physical nexus standard, protect businesses from audits and harassment from other jurisdictions, and hold taxpayers harmless overall,” said ATR President Grover Norquist in a Daily Caller op-ed Thursday. By that standard, he said MFA “dramatically fails on all counts.”