Jessica Melugin, adjunct fellow with the Competitive Enterprise Institute, recently wrote an opinion piece in the Oklahoman that argues policymakers should consider an origin-based tax system for Internet sales instead of the Marketplace Fairness Act.  Melugin explains that although states and municipalities believe the Marketplace Fairness Act will fill their budget gaps, the returns will not be what they expect and, in turn, will hurt businesses in their own communities.  “Municipal officials are turning to the Marketplace Fairness Act (MFA) to fill budget gaps. While their hope is understandable, their faith is misplaced,” wrote Melugin.  “The bill, now before Congress, would subject Sooner State businesses to taxes and regulation in other states. It will hurt online and mail order businesses and set a dangerous precedent for taxpayers.”

Melugin encouraged policymakers to instead look at an origin-based system for Internet sales, which would indeed “level the playing field” for all retailers.  She explained that an origin system would make “all purchases, regardless of method — whether online, by catalogue or over the phone — taxed at the point of purchase, just like in physical stores. An origin-based approach would treat all retailers the same and preserve collecting authorities’ accountability to taxpayers.”

Visit News OK for more information on an origin based tax system and to read Melugin’s opinion piece.