House Committee Hears Alternative Proposals for Online Sales Taxation

Overview


Stephen Kranz warned the House Judiciary Committee that use of origin-based sourcing for online sales taxation could lead sellers to locate in states without a sales tax, maintaining their advantage over brick-and-mortar retailers. Origin proposals “impose a different state’s tax rules” on consumers, he said, because “each of the consumers in your state will be subject to the tax laws of the location of where the seller is located.” Mr. Kranz noted that by creating a new entity in a non-sales-tax state, the seller of record “can have all your operations somewhere else, but your seller of record is located in a non-sales-tax state.”