Remote Transactions Parity Act Bows Amid Criticism From Marketplace Fairness Act Foes

House Oversight Committee Chairman Jason Chaffetz, R-Utah, released the text of the Remote Transactions Parity Act (HR-2775) Monday, encountering opposition from several opponents of the Marketplace Fairness Act (S-698) but also support from several major online retailers. HR-2775, which would give states additional limited freedom to charge sales taxes on out-of-state customers’ online purchases, mirrors some elements of S-698 but would exempt remote sellers with sales of less than $10 million during the first year after the law takes effect, with lower exemption thresholds in the second and third years. The bill also contains additional protections for remote sellers and certified software providers. HR-2775 would “modernize current law and strike the appropriate balance between sales tax parity and a state’s right to manage tax policy within its borders,” Chaffetz said in a news release that touted support from 15 other lawmakers, including House Judiciary Committee ranking member John Conyers, D-Mich. Chaffetz’s introduction of HR-2775 was less than a week after the House passed the Permanent Internet Tax Freedom Act (PITFA) (HR-235) on a voice vote. Some supporters of that bill, which would permanently extend the existing ITFA, remain concerned that consideration of its Senate equivalent (S-431) could become entangled with S-698 (see 1506090058). A pro-ITFA lobbyist told us HR-2775 could encounter trouble in the House Judiciary Committee since committee Chairman Bob Goodlatte, R-Va., has already indicated concerns with the bill. Chaffetz touted support from major online retailers Amazon and Overstock, along with traditional retailer interests like the National Association of Retailers. Other e-commerce interests criticized HR-2775, with eBay saying HR-2775 is “bad legislation” and “would impose burdensome remote sales tax collection and remittance requirements on Internet-enabled small businesses.” NetChoice compared HR-2775 unfavorably with S-698, saying it’s “even worse than the original. A bill that claims to focus on collecting more online sales taxes with less burden on small businesses actually accomplishes none of its goals.” Americans for Tax Reform and other anti-tax advocates also strongly opposed HR-2775 Tuesday, with ATR saying in a blog post it opposes the bill because it “does not maintain the physical nexus standard and sets a precedent of taxation without representation.”