No Windfall for States in Online Sales Tax Legislation, Former Virginia Governor Says

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By Marc Heller

A former governor of Virginia joined the fight against legislation to boost sales tax collection on online sales, saying June 18 that states will not collect as much revenue as officials have claimed.

“This windfall isn't there,” former Gov. James Gilmore (R) told reporters at a news conference organized by opponents to the Marketplace Fairness Act (H.R. 684 and S. 743). Gilmore, governor from 1998 to 2002, is president of the Free Congress Foundation.

Gilmore, whose home state has an expanded role in the debate in Congress, said the top 100 online retailers already collect taxes on 83 percent of their sales, suggesting the revenue lost to state governments is less than the $23 billion annually that officials estimated in 2012.

“All you get is the bad, and not the good,” Gilmore said.

Virginia has set its multiyear highway budget on assumptions of sales tax revenue resulting from the Marketplace Fairness Act. Rep. Bob Goodlatte (R-Va.) is chairman of the House Judiciary Committee, which will consider the legislation.

The Senate passed its version, which closely resembles the House bill, May 6 by a 69-27 vote (88 DTR G-3, 5/7/13).The House bill has been referred to Goodlatte's committee, but he has given no indication when he may take up the legislation.

At the June 18 news conference, Sens. Rand Paul (R-Ky.) and Ted Cruz (R-Texas) spoke against the legislation, as did several Republican lawmakers in the House.

Cruz stressed the age of senators who supported S. 743, which was sponsored by Sens. Mike Enzi (R-Wyo.) and Richard Durbin (D-Ill.), suggesting younger lawmakers are more in touch with the issues surrounding taxation of internet sales.

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