WASHINGTON, April 20, 2016 - The nation’s largest farm organization is trying to make sure that online sales are treated – and taxed – the same as their brick and mortar counterparts in an effort to shield their members from soaring property taxes.

The concern stems from a trickle-down effect of sorts, Pat Wolff, a tax expert for the American Farm Bureau Federation, told Agri-Pulse. If states miss out on tax revenue potentially lost due to online sales, a shrinking tax base and decreasing revenue could turn into increased property taxes that would hit farmers and ranchers especially hard.

“Farmers are landowners and (they are) concerned about property tax levels,” she said. She also noted marketplace fairness and the strength of rural communities, whose businesses might not have an online presence, as other reasons AFBF is hoping for a leveled playing field in the sales tax arena.

The issue of an Internet sales tax is obviously much bigger than just the agricultural component. In an email to Agri-Pulse, a spokesman for the National Federation of Independent Businesses said the organization doesn’t have a position on Internet sales tax because of a split in opinion in the organization’s membership. On one hand, businesses with a strictly brick and mortar operation would benefit from an increased tax base in their communities, but barring a gross sales exemption of some kind, small businesses that also sell online would be required to impose taxes wherever those goods might be headed.

As a page on NFIB’s website puts it, “the potential burden of both action and inaction depends on your perspective.”

The disagreement on the matter includes differing viewpoints in Congress. Last year, Sen. Mike Enzi, R-Wyo., introduced the Marketplace Fairness Act (S.698), which would allow states to require that Internet sales be taxed in the state of the purchaser. A similar bill passed 69-27 in 2013 in the Senate, but the House never voted on it as then-Speaker John Boehner said he had “significant concerns” about the bill and blocked its movement.

On last year’s Cyber Monday – the Monday after Thanksgiving that has become known for online shopping deals – four Republican senators wrote a letter urging congressional leadership not to consider the bill, saying it “could lead to Internet retailers in all states being forced to become tax collectors for nearly 10,000 tax jurisdictions across the country. Only in Washington would such a proposal be labeled as the ‘Marketplace Fairness Act.’ ” 

Senate Democrats have said they received a commitment from Senate Majority Leader Mitch McConnell, R-Ky., while House Speaker Paul Ryan, R-Wis., has been noncommittal on the idea, and his office has said he is leaving it up to the committees.

Even if Congress passes on the issue this year, Wolff said she doesn’t expect the issue to go away.

“The debate will continue, because whether there’s legislation this year, whether this spills into next year, quite frankly there’s huge amounts of money at stake for governments and for retailers on both sides of the argument,” Wolff said.


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