The National Taxpayers Union and a D.C.-based think-tank are touting a new survey which finds a majority of Iowans are opposed to paying sales taxes on internet purchases.
A Gallup poll last year found 57 percent of Americans were opposed to internet sales taxes and the groups’ survey, which was conducted in Iowa this past May, found 67 percent of Iowans were opposed to the concept.
Andrew Moyland of the R Street Institute was at the Iowa capitol today to discuss the survey with legislative staff and representatives from Iowa business groups. Moyland suggested candidates for all offices should be wary of allowing states to collect internet sales taxes, including prospective presidential candidates like Ted Cruz, Mike Lee and Marco Rubio who’ve been campaigning in Iowa. There may soon be a vote in the U.S. Senate on a bill that would give states greater authority to collect sales taxes on internet sales.
“This is definitely coming to a head now and I think that folks who are supporters of this would like to get this done as soon as possible because even supporters don’t want to be on record supporting an internet sales tax bill so close to an election,” Moyland said during an interview with Radio Iowa.
Moyland praised Chuck Grassley, Iowa’s Republican senator, for opposing what’s called The Marketplace Fairness Act that would give states broader authority to collect sales taxes on internet purchases. Others who support the legislation say Main Street businesses see more and more people who come in, look over the merchandise, then go online to make the purchase — escaping the sales taxes they’d pay if they bought the product in the store. Moyland rejected that argument.
“There are 46 different states with sales taxes and 9,998 different taxing jurisdictions across the country,” Moyland said, “and so if you’re asking online retailers to have to jump through all those hoops when brick-and-mortar retailers are just jumping through one where they’re physically located, I think that’s the opposite of a level playing field.”
According to a University of Tennesse estimate, $88 million in sales taxes that were legally due to the State of Iowa were NOT collected on internet purchases made in 2012. Moyland argued that “pales in comparison” to the sales taxes the State of Iowa fails to collect because the state sales tax is not charged on all services. For example, boat repair services are not subject to the Iowa sales tax and, ironically, the state sales tax is not charged to any “on-line computer service” operating in Iowa. Here’s the comprehensive list of state sales tax exemptions for both goods and services.