Internet Sales Tax

Floor Speech

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Mr. DeSANTIS. I thank the gentleman from Kentucky, and thank you for your leadership on getting out ahead of this and really leading the charge. You're right, this will not be good for the economy. People will say it's not really a tax increase because some of these taxes are essentially use taxes that are already due. The fact of the matter is this will hurt consumers because they are going to have to pay more, and that is not the recipe for success in a high-unemployment, low-growth economy, which is what we have now and is what we've had for a number of years.

In terms of making consumers pay more in taxes, I for one am sick of politicians in Washington and in State capitals throughout the country putting the interest of government ahead of the interests of the people. Our job is not to extract as much money as possible from our fellow citizens, but it's instead to provide a framework that protects their freedom and liberty and allows them to pursue their dreams. This bill obviously doesn't help do that. In fact, it hinders it. It hinders it by making it more difficult on consumers, but also will make it more difficult on up-and-coming new businesses that do business online. This bill represents taxation without representation, and the reason it does that is because the bill would require online businesses to determine, collect, and remit taxes to States with which they have no physical connection.

So if you have a business in Florida that does online sales and you sell to somebody in California, you're going to be responsible for determining California's sales tax, collecting it, and then sending it to California. The problem is if you have no physical connection to that State, you have no way to hold tax-happy politicians in States like California accountable for the decisions they make in terms of taxing, spending, and regulation.

I would say also, people say that there are local stores who have to pay sales tax. If you sell online to somebody out of State, you're not having to sell the tax. We don't require any stores on a local sale to figure out where the consumer came from and then send the tax over to that State. They simply collect the tax that's due in their State, so the compliance requirements are completely different. Indeed, there are over 9,600 taxing jurisdictions in the United States.

This bill specifically permits audits from the other States that have sales tax and from Indian reservations, and we have several hundred federally recognized Indian tribes, so this creates a huge compliance burden for our small businesses.

I just don't think it is good policy to saddle small businesses in Florida with red tape and additional compliance costs. I mean, why on Earth would any Floridian want an up-and-coming business to face a tax audit from a State like California or Illinois?

And I would say, as the gentleman from Kentucky pointed out, especially in light of what we're seeing with the malfeasance committed by the IRS out of Washington, D.C., you know, the IRS is at least somewhat accountable to the people, at least in theory, because we can always vote out the administration that oversees the IRS.

If you have an out-of-State tax audit, you don't have any political representation, so why would they care about your rights? They're not going to care about your rights. They're going to care about getting your revenue.

I just want to say a thing about fairness. People say, well, you know, you have brick-and-mortar, local stores versus these Internet businesses; but I would suggest that that distinction is illusory, and the reason why is many companies that do business online are brick-and-mortar companies.

I have a business in my district in Ormond Beach, Florida. It's called Coastal Moto, and this is a gentleman that put his entire life savings into this business. They now have grown to have five employees. They make custom wheels for Harley Davidson motorcycles, and they ship them worldwide. But they have employees showing up every day to work there, so they are both brick-and-mortar and online. So it's essentially brick-and-click.

And I would also just endorse what the gentleman from Kentucky said, that the tax would give large companies a competitive advantage, because anytime you saddle businesses with more compliance cost, that will create barriers to entry for smaller companies, and the big businesses are always able to comply more easily.

And look, I want companies of all sizes to do well. You know, big businesses, if they're doing well, God bless them. I just don't want to tilt the playing field in favor of them and make it more difficult for new businesses to start and grow.

The Internet is one of the most pro-growth, pro-opportunity inventions in all of human history. It literally gives anybody the chance to move a product. If you have an idea, you can go online, you can put that out, and you can be successful. It's much easier, with the Internet, to have a successful business than it was 100 years ago. You're able to get into the market more cheaply and more affordably. That's not something that we should try to undermine. That's something that we should want to continue to promote.

And finally, I would just say, is it fair to burden Florida businesses in order to fund excessive spending in States that suffer from severe fiscal mismanagement? I mean, for example, in California, you have county administrators retiring with a $400,000 pension for life. And so we're going to put burdens on our companies to be able to send money over there so that they can fund that extravagance? And I would also note that a lot of that money goes to funding union dues that end up helping fund political companies. So why would we want to do that?

So the bottom line is that the bill is bad for consumers; it represents taxation without representation; it will stymie small business growth; and it will create perverse economic incentives. Our political system right now is suffering from an accountability crisis. The last thing we need to do is expand government and add to this problem.

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Mr. DeSANTIS. I thank the gentleman from Kentucky, and I would just add to your comments. You started by talking about federalism, the ability to kind of choose different tax laws, whatever laws, and this would actually facilitate higher taxes. It's a thumb on the scale in favor of higher taxes because it gives States the wherewithal to tax beyond their borders. So we should at least be trying to go in the other direction. I want Florida to be more like Montana, not more like some of the other high-tax States. And so that bears repeating.

Here are some of the folks who have written in via Twitter with their thoughts. Chris writes in:

Please tell the House that #InternetTax translates into higher costs for families and consumers. A weak economy cannot afford this.

Andrew writes in:

This will just be the 21st-century version of Smoot-Hawley. Will the lunacy from D.C. never cease?

Jay writes in and says:

The Internet tax is an inappropriate extension of the State's powers. It does not make commerce more fair.

Another fellow writes in and says:

It's a revenue grab, plain and simple. No taxation without representation. Is that vague?

Tiffany Lyle says:

If you tax the Internet, it's like taxing air. We work hard enough to earn what little we have.

And then Glenn writes in:

Remind them of how the Stamp Act went.

I have some more, but I will yield back to the gentleman from Kentucky because I know you probably have some more comments, as well.

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Mr. DeSANTIS. We do have some more.

Cory writes in:

I feel it may hinder an online business I've just started. It's already making business pay.

Mark says:

#InternetTax won't help local stores, but will protect online incumbents from new competition.

Taylor Neuhaus writes in and says:

I like the #InternetTax about as much as I like getting teeth pulled.

We have another fellow writes in and says:

It hurts small businesses, and it's basically Walmart vs. Amazon with consumers in the middle.

Finally, I think this is a great comment from Ian Stumpf:

An Internet tax will hurt one of the few remaining healthy sectors of the economy #disastrous.

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