This week, Americans for Tax Reform (ATR), a nonprofit taxpayer advocacy group, released a post arguing that the Senate passed Marketplace Fairness Act would cripple American small businesses that leverage technology. “The Marketplace Fairness Act is being billed by its supporters as a common-sense proposal that would level the playing field between online and brick-and-mortar retailers by taking away online retailers' exemption from sales tax”, writes ATR.  “What sounds noble, or at least harmless, at first glance begins to sound more like foxes volunteering to guard the hen house when you look at how the MFA would play out in practice, and when you examine who's supporting it and who isn't.”

The blog continues to explain the challenges that the Marketplace Fairness Act would create for small tech-enabled businesses. As it points out that small businesses would have to comply with varying rules and tax rates in over 10,000 jurisdictions. According to a study commissioned by the True Simplification of Taxation (TruST) coalition; "Mid-market online and catalog retailers ($5-50 million in annual sales) will spend $80,000 to $290,000 in setup and integration costs for the so-called "free software" promised by advocates of the Marketplace Fairness Act (MFA). And every year, these retailers will also spend $57,000-$260,000 on maintenance, updates, audits and service fees charged by software providers."

In addition, businesses would be forced to be the tax collectors for states where they do not even have a physical presence.“Why should any state be allowed to collect taxes from businesses in other states? What right does the government of New York have to take money from an Arizona business? Their ultimate goal is to export their tax and regulatory burden to Americans who have no recourse at the ballot box."

Find more information on ATR's position on MFA and read their recent blog post.