Proponents of legislation requiring online companies collect sales tax feel they received a big boost when Rep. Bob Goodlatte, chairman of the House Judiciary Committee, announced “principles” for an Internet sales tax. 

The principles include: tax relief; tech neutrality; no regulation without representation; simplicity; tax competition; states’ rights; and privacy rights.

The Senate passed the Marketplace Fairness Act, which would enact and Internet sales tax, in April, but momentum for the bill in the House stalled. At least one cosponsor said he didn’t think the legislation would pass.

But proponents seized on Virginia Republican’s announcement as sign of renewed momentum for the bill.

“These principles make clear that the current system is broken, and that the Chairman is committed to closing the online sales tax loophole once and for all,” said Bill Hughes, senior vice president for government affairs for the Retail Industry Leaders Association, in a statement. “Movement in the House coupled with the overwhelming bipartisan vote in the Senate earlier this year means the online tax loophole’s days are numbered.”

Not so fast, say opponents of the online sales tax bill.

Katie McAuliffe, federal affairs manager and executive director for digital liberty for Americans for Tax Reform, said in a statement that Goodlatte’s putting forth a set of principles doesn’t “signal any momentum to pass anything.  What it does signal is that the Senate rammed though vastly unpopular and misguided legislation without any serious thought or discussion.”

JCK looked at the debate over online sales tax in its September issue.

Rob Bates

JCK News Director