Cruz ‘Always Mischaracterizes’ Internet Sales Tax Issue, Shapiro Says

CEA President Gary Shapiro rejected warnings voiced earlier this week by Sen. Ted Cruz, R-Texas, that leaders in both parties will likely use the lame-duck Congress to push through a nationwide Internet sales tax (see 1411040021), in an interview Wednesday. Shapiro also said he rejects Cruz’s premise that Internet taxes are one of the favorite causes of corporate lobbyists to seek new taxes to help big businesses at the expense of the little guy. "There is the Senator Cruz-Grover Norquist viewpoint that always mischaracterizes that issue," Shapiro said. Norquist is president of Americans for Tax Reform. It’s not that lobbyists want to assess new taxes on e-commerce sales, it’s "that those taxes are required to be paid already under the laws of 45 states," Shapiro said. "They’re just not being paid." Shapiro puts the odds of Internet sales tax legislation being moved in the lame-duck Congress at "probably a little less than 50-50," he said. "There is legislation which must pass in the lame-duck session -- the budget agreement. Senators have said that budget agreement is where this Internet sales tax legislation will go. It did already pass the Senate. There is some reluctance by Speaker [John] Boehner [R-Ohio] to pass it." The legislation "is very important to companies like Fry’s and Best Buy and Walmart and every other brick-and-mortar retailer which employs real people," Shapiro said. "They’re at a competitive disadvantage because their customers are not paying the sales tax that they owe when they buy online." Cruz and Norquist "have mischaracterized this as a new tax," when "it’s not a new tax at all," Shapiro said. "It’s a tax that consumers are responsible for, but only a very small number pay." Representatives for Cruz and Norquist didn't comment.