There’s nothing fair about the Marketplace Fairness Act, which both of North Dakota’s Senators voted for. In addition to lumping more red tape and tax burden onto online shopping – which means higher prices for everyone who shops online – its an expansion of taxation to companies that use none of the services the taxes support.
That is, fundamentally, unfair. But the legislation may be even worse. It may also result in a tax on your retirement savings too:
The bill authorizes states to “require all sellers not qualifying for the small seller exception [$1 million in sales or less] to collect and remit sales and use taxes with respect to remote sales sourced to that Member State.” Yet “sellers” and “sales” are never specifically defined, and there are no specific exemptions for certain types of products or services.
Financial experts say this means states tax “sales” such as stock trades in a mutual fund or brokerage account, or even contributions to pension plans such as 401(k)s that were designed to be tax-free until retirement.
The tax expansion may hit online financial services sales as well:
The Securities Industry and Financial Markets Association (SIFMA), representing securities firms and asset managers, issued a statement urging hearings on the MFA’s impact on financial services. As written, “the bill could lead to unexpected costs being passed on to consumers of financial services, including sales taxes on services or state-level stock transaction taxes,” the group said.
Similarly, the Financial Services Roundtable, which represents banks, insurance companies and brokerage firms, states these concerns: “A transaction tax on financial services products will hurt retail investors, retired Americans, and small businesses, effectively making it more expensive for them to invest and plan for the long-term. Without hearings, these implications and others will not be properly addressed.”
Here’s another question: What about digital purchases such as e-books, music and apps? Are those $0.99 apps and Kindle books about to get more expensive too? Those sort of sales represent billions of dollars of commerce these days, and hiking taxes on them means a lot more expensive for Americans.