WASHINGTON (June 16, 2015) – The R Street Institute today announced the formation of a coalition of nearly 20 groups representing millions of citizens opposed to a new Internet sales tax bill.

The Remote Transactions Parity Act, despite proponents’ claims that it would effect parity, imposes onerous new rules only on online retailers. Groups such as Americans for Prosperity, Americans for Tax Reform and Heritage Action have joined R Street in opposing this bill.

“These organizations have banded together before to successfully oppose similar legislation, such as the Marketplace Fairness Act,” said R Street Executive Director Andrew Moylan. “In a classic example of the whole being greater than the sum of its parts, we are thrilled to be able to get so many great partners to join us in continued opposition to overcomplicated laws that unwisely empower state and local governments.”

The coalition, which also includes the Competitive Enterprise Institute, FreedomWorks and the National Taxpayers Union among others, sent an open letter today to members of the House of Representatives outlining the many problems with the RTPA, sponsored by Rep. Jason Chaffetz, R-Utah.

“Like the failed MFA, the new RTPA would dismantle proper limits on state tax-collection authority while potentially causing serious damage to electronic and interstate commerce,” the coalition wrote. “Furthermore, the bill would create a decidedly unlevel playing field between brick-and-mortar and online sales.”

Under the RTPA, only remote retailers would be required to ascertain their customers’ place of residence; look up the appropriate rules in nearly 10,000 taxing jurisdictions; and then collect and remit sales tax for a distant authority with which they may have no tangible collection.

R Street has been a leader in identifying problems with legislation that promotes a “destination sourcing” taxing scheme for online sales. The institute has encouraged Congress to pursue a dramatically simpler approach based on “origin sourcing,” which would align remote sales tax-collection rules with those governing brick-and-mortar sales. Moylan discussed this potential solution in testimony before a House Judiciary Committee hearing earlier this year.


Featured Publications