Coalition Letter Supporting the Digital Goods and Service Tax Fairness Act (S. 971)
U.S. Senate Committee on Finance
RE: S. 971, Digital Goods and Services Tax Fairness Act
Dear Members of the Senate Committee on Finance,
On behalf of millions of taxpaying Americans, we write to urge your support for the Digital Goods and Service Tax Fairness Act (S. 971). Sponsored by Sens. John Thune (R-S.D.) and Ron Wyden (D-Ore.), the measure creates a much-needed framework for taxing digital goods and services across the fifty states to prevent double taxation and hold policymakers accountable for enacting new taxes.
Across the country, states are establishing new taxes on downloaded goods, such as music, books, movies, and mobile applications. This has resulted in a patchwork of varying standards for taxing digital e-commerce, and could result in multiple states taxing a single consumer purchase or levying higher and discriminatory taxes on downloads. S. 971 will ensure that when a digital product is purchased, it is taxed
once and only once.
E-commerce is inherently an interstate activity, as the Internet does not acknowledge state borders. As a result, a consumer in Montana could purchase a digital product online from a company in California that is located on a server in North Carolina. The legislation would ensure that only the state where the consumer is based has taxing authority. Without the federal framework contained in this bill, each of these states could claim taxing jurisdiction, resulting in excessive taxation of online goods and services.
The Digital Goods and Services Tax Fairness Act will make sure there is accountability and public awareness should a state begin to tax digital goods. Today, eight states have begun taxing downloaded products by administrative fiat at state Departments of Revenue, bypassing the legislative process altogether.
Internet and digital commerce is a highly dynamic and rapidly growing sector of the American economy. The Digital Goods and Services Tax Fairness Act will help to eliminate tax-related burdens on interstate commerce that could stifle the vital online market.
As you consider a number of tax-related measures impacting interstate commerce, we urge you to support S. 971, the Digital Goods and Services Tax Fairness Act. The measure will bring much needed clarity and implicity to interstate e-commerce, while preventing states from engaging in excessive and discriminatory tax policy.
Sincerely,
Grover Norquist
President
Americans for Tax Reform
U.S. Chamber of Commerce
Andrew Moylan
Vice President of Government Affairs
National Taxpayers Union
David Williams
President
Taxpayers Protection Alliance
Chuck Muth
President
Citizen Outreach
Seton Motley
President
Less Government
Jeffrey Mazzella
President
Center for Individual Freedom
James Valvo
Director of Policy
Americans for Prosperity
Tom Schatz
President
Council for Citizens Against Government Waste
Mike Wendy
Director
MediaFreedom.org
Kelly William Cobb
Executive Director
Digital Liberty
Webb Scott Brown
President/CEO
Montana Chamber of Commerce
