Legislation that would tax all online purchases and potentially funnel billions of dollars back to states is being introduced in Congress, but Iowa Senator Chuck Grassley isn’t a fan. Grassley, a Republican, says the proposal called the Main Street Fairness Act goes against one of his primary political creeds.
“It’s a tax increase and I’m not ready to vote for tax increases,” Grassley says, “particularly, I don’t want to be responsible for voting for tax increases at the state level.” The bill is being introduced by Senator Dick Durbin, a Democrat from Illinois. Durbin sponsored a similar measure last year that never reached the floor for a vote. Grassley says he’ll try to keep an open mind about the legislation and won’t say he’s absolutely against it.
“I’m not going to co-sponsor the bill,” Grassley says. “If the bill comes up for a vote, I’m going to wait until that happens and decide at that particular point, but I don’t think that I’m ready to say that Iowans ought to be paying higher taxes.”
Grassley says the legislation would counter a U.S. Supreme Court ruling that said states could not collect taxes on Internet purchases unless the seller had a brick-and-mortar building within the state’s borders.
“If the state of Iowa can find some way of collecting that tax, then that’s okay with me, but I don’t want to be responsible for that burden,” Grassley says. “Particularly in times of recession, you don’t increase taxes.” Some estimates say Internet sales are rising at a rate of 15% per year, with one report saying online purchases last year hit a record $165-billion.