GOP opponents of online sales tax: It's generational

Cruz, citing data from Heritage Action, told reporters after the event that it was no accident that every GOP senator under 50 voted against the Marketplace Fairness when it passed the Senate – easily and with bipartisan support – last month.

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“I think it has a great deal to do with being part of the Internet age,” Cruz said. “I remember a former elected official here who referred to the ‘Internets.’ There is a breakdown of those who appreciate the incredible freedom, the entrepreneurial oasis, that the Internet represents.”

Both supporters and opponents of the Marketplace Fairness Act say that the measure faces more obstacles in the House, where Speaker John Boehner (R-Ohio) has sharply criticized the bill.

Boehner has also said the measure would go through the committee process, and House Judiciary Committee Chairman Bob Goodlatte (R-Va.) has outlined a series of concerns about the bill in its current form. Goodlatte has said he is open to considering legislation on the matter.

Supporters of the bill – like Amazon and lobby groups like the National Retail Federation and Retail Industry Leaders Association – say the proposal corrects a long-standing and unfair advantage that online retailers have over brick-and-mortar shops.

A 1992 Supreme Court ruling found that states can only force companies that are physically located within their borders to collect sales taxes. The Marketplace Fairness Act would allow states to collect revenue on online purchases from out-of-state retailers, which advocates say could raise some $23 billion at a time when many local governments are still struggling.

The Marketplace Fairness Coalition, a group backing the online sales tax measure, pushed back on the GOP lawmakers and other opponents of the bill, like the online retailer eBay. 

“It is unfortunate that the organizers of this event are more concerned with protecting eBay’s bottom line at the expense of thousands of Main Street businesses.  Instead of making disingenuous exaggerations about the Marketplace Fairness Act, these groups should explain why a handful of businesses should be given special treatment by the government," the coalition said in a statement.

“This legislation levels the playing field so that all retailers are treated equally in the free market.  That's why it's received strong bipartisan support from Republicans, independents and Democrats, alike in Congress, and bipartisan support from governors across the country."    

But Cruz cast the fight over online sales tax as politicians and big-time lobbyists trying to pull one over on consumers and startups, and several lawmakers said the measure would act as a tax increase, even if the sales taxes were already owed.

Rep. Ron DeSantis (R-Fla.) even tied the bill to the current furor over the IRS and its targeting of conservative groups – mentioning Lois Lerner, an agency official at the center of that controversy.

“I don’t trust the taxing authorities that we have in this country,” DeSantis said. “And if I don’t trust Lois Lerner and the federal Internal Revenue Service, why on Earth would I want to subject Florida businesses to revenue collectors in California or Illinois?”

This post was updated at 1:44 p.m.