County lobbyist has doubts Internet sales tax will ever pass


Published: Friday, December 14, 2012 at 5:38 p.m.
Last Modified: Friday, December 14, 2012 at 5:38 p.m.

Supporters of a U.S. Senate bill that would permit states to levy an online sales tax that could fatten the wallets of state and local governments are pushing for its adoption by the end of the year.

But Alachua County's longtime federal lobbyist, F. Marion Turner, says he doubts that will happen.

The Marketplace Fairness Act, which would enable states to implement an online sales tax, has received bipartisan backing. However, Turner cautioned that online sales tax measures have been introduced for at least the past five or six years with no success.

Since a recent attempt to tack the bill onto the 2013 defense authorization bill failed, Turner — who works for the lobbying firm Alcalde & Fay — sees its chance of passing this year as slim to none.

"That's a common tactic up here for them to try and tack on small pieces of legislation that wouldn't necessarily be able to pass on their own to larger pieces of legislation that have to pass one way or the other," he said.

He said he doubts the bill could be folded successfully into a fiscal cliff package this month either, assuming Republicans and Democrats reach a compromise that will prevent the mix of tax increases and automatic spending cuts from taking effect.

Turner said the local government community has advocated for an online sales tax since the infancy of Internet commerce, but members of Congress have expressed concern they could "kill the Internet by levying taxes on it." Now, the online commerce market is massive and in no danger of collapsing, but top Internet retailers that oppose such sales tax measures have a powerful presence on Capitol Hill.

"They've kind of mobilized themselves into this juggernaut against any efforts to tax it," he said. "Internet commerce has an effective advocacy campaign in Washington at present."

Turner said he believes an online sales tax bill probably will never pass at the federal level.

"There's always hope that you could get something along these lines, but what I've found is the longer an issue kind of stays out there and doesn't gain traction so to speak, the more difficult it is to make progress," he said. "I think at the end of the day, we're too far down this road."

But revenue-hungry governments from the federal to the local level could press policymakers to consider it.

An online sales tax could wrangle considerable revenue for state and local governments, Alachua County Communications Coordinator Mark Sexton said. The county will encourage its legislative delegations at the state and federal level to support related measures, he said.

A 1992 Supreme Court decision ruled that states can't force out-of-state retailers to collect sales tax from in-state customers, said Jonathan Hamilton, the R. Perry Frankland professor of economics at the University of Florida. An earlier 1967 Illinois-based Supreme Court case laid the foundation for that later ruling, but Congress has the power to pass a law that enables states to levy such a tax.

Online retailer Amazon already has agreed to collect sales tax in certain states, including Massachusetts, as determined in a recent agreement. Hamilton suggested people consider the "bricks and mortar stores" already paying a sales tax while Internet retailers remain largely exempt.

He said Florida is essentially giving Amazon a tax break under the condition the retailer not build a warehouse in the state while non-online stores based there collect sales tax and create local jobs.

"We're letting Amazon charge lower prices to consumers as a reward for not providing any jobs to Florida residents," he said.

Some worry an online sales tax could stifle growth in a weak economy. Turner said one popular argument against its implementation is that buying goods online doesn't cause the wear and tear in a local community that visiting a physical store does, such as driving on area roads.

While Turner doubts an online sales tax will pass Congress by the end of this year, or ever for that matter, he isn't prepared to write off the possibility entirely.

If it does eventually pass, he said it would be "incredibly helpful" to local governments given how many people are shopping online now.

In January, a new session will begin and a bipartisan group of senators will surely reintroduce the bill if it doesn't pass this year, he said.

As governments examine sources of revenue across the board during a period of tight budgets, supporters pushing an online sales tax could pull it off, he said.

Contact Morgan Watkins at 338-3104 or morgan.watkins@gvillesun.com.

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