Last week, Congressman Jim Sensenbrenner (R-WI) introduced the Business Activity Tax Simplification Act, which prohibits states from trying to impose business activity taxes on businesses located outside of their borders.  As more and more sales are transacted over the Internet, businesses both large and small have been affected by a lack of clarity of when a state can impose business activity taxes on an out-of-state business.  This bill would give clarity and certainty for businesses and protect them from the imposition of additional tax burdens.

John Feigenbaum, owner of David Lawrence Rare Coins, recently submitted a letter to the editor of Hampton Roads to express how damaging the so-called Marketplace Fairness Act would be to his business if the proposal were enacted into law.  Feigenbaum explains that it would be extremely burdensome to collect and pay taxes to thousands of ever-changing jurisdictions.  In addition, he expresses his concerns with becoming a tax collector for businesses where he doesn’t even have any physical presence.

Last week, Senator Kelly Ayotte (R-NH) sent a letter to the leaders of the Senate Finance Committee calling for any tax reform proposal to keep the Internet free from burdensome tax requirements and restrictions, including new Internet sales taxes.  The Senate Finance Committee is in the process of determining their priorities for comprehensive tax reform this Fall and have called on Senators to express their priorities for what should and should not be included in the final reform package.

George Allen, former Governor of Virginia and U.S. Senator, recently published an op-ed in the Washington Times on why the so-called Marketplace Fairness Act disadvantages small Internet-enabled businesses and benefits their larger competitors.  Allen calls on Congress to establish policies that encourage small business growth and development and keep the Internet free from “of unfair, discriminatory taxation policies that would impede its future growth as a source of commerce”.

Tony Kornrumpf, owner of Hoops Enterprise LLC, recently submitted a letter to the Chattanoogan expressing why he thought that the so-called Marketplace Fairness Act would kill jobs and stifle small business growth and development.  As a small business owner that sells PC software and anti-virus programs, Tony operates in a very competitive marketplace and he is concerned how he will be able to compete when he will be forced to keep track of 10,000+ sales tax jurisdictions nationwide.