Conservatives Should Take A Second Look at the Marketplace Fairness Act

Senator Jim DeMint is a leader in the conservative movement, consistently fighting to limit the federal government’s size and scope and deferential to states’ rights – positions and views that many others, including myself, share with the Senator.

Nonetheless, I was concerned when I read the Senator’s remarks on Twitter and on his blog about the Marketplace Fairness Act (MFA).  More specifically, he asked his Twitter followers, “Heard about the push for a new Washington mandate for internet taxes on your online purchases”?

Social media often forces lawmakers to draw quick conclusions without actually looking at legislation and speaking with the small businesses that it would impact.  Unfortunately, Sen. DeMint’s tweet relays a clear misunderstanding about the proposed law, which was originally mischaracterized in a Wall Street Journal piece the day before.

The MFA does not mandate Internet taxes for online purchases.  It allows states to require web retailers operating in their jurisdictions to collect sales taxes; something states already require brick-and-mortar retailers to do. Currently, two competitors in the same marketplace (one online and the other behind a storefront) are governed by two distinct tax regimes, giving the online competitor an unfair advantage.

It’s funny. Take almost any other industry – the energy sector, say – and Sen. DeMint would rightly oppose the federal government’s involvement in picking winners and losers. Yet when it comes to retailers, Sen. DeMint evidently feels some in the industry should be required to collect a tax and others should not.

Many conservative Republican Governors support the Marketplace Fairness Act.

New Jersey Gov. Chris Christie:  “I too, along with governors like Governor Daniels and others, urge the federal government and the Congress, in particular, to get behind Senator Lamar Alexander’s legislation [MFA] to allow states to be able to make these choices for themselves.”

Maine’s Tea Party Gov. Paul LePage:  “I would like to respectfully call on you both to lend your strong support to the Marketplace Fairness Act.”

Virginia Gov. Bob McDonnell on the Commonwealth’s tax fairness bill:  “This bill helps to ensure that online retailers with a physical presence in Virginia are treated the same as traditional brick and mortar retailers who are already required to collect and remit existing sales taxes on goods sold in the Commonwealth.”

And on and on.

The MFA is neither a mandate nor a tax. It empowers states to treat online companies the same as they treat local retailers.

As Red State’s own Neil Stevens wrote recently, “Republican governors are lining up behind the compact and the bill [because] they don’t want to raise taxes or impose new ones. The Marketplace Fairness Act is a Constitutional means of fixing the sales tax problem by restoring the originally intended revenue stream of taxing purchases by people in a state.”

I urge Senator DeMint to join with these governors – his fellow conservatives – and take a second look at the Marketplace Fairness Act.