US House considers alternatives to Internet sales tax bill
An online sales tax based on the seller’s location would work much like brick-and-mortar sales taxes do today, added Andrew Moylan, outreach director at the R Street Institute, a think tank advocating for free markets. If a Washington, D.C., resident shops in Virginia, she pays Virginia’s sales tax, he noted.
But Stephen Kranz, a partner in the McDermott Will & Emery law firm and a member of the Streamlined Sales Tax Governing Board, said a tax system based on the seller’s location would be easy to game and would likely drive Internet retailers to relocate or set up ghost headquarters in the handful of states without sales taxes.
The proposals from Moylan and Cox would create “a race to the bottom” in state tax rates, added Representative Jerrold Nadler, a New York Democrat.