WASHINGTON, Dec. 13, 2016 /PRNewswire-USNewswire/ -- Tennessee regulators are asking the state legislature for new sales tax collection rules, but the clear majority of Tennesseans think that the current online sales tax collection process is working just fine, per a new NetChoice survey of Tennessee residents*. Further, many think the planned changes could have an adverse effect on Tennessee businesses.
More than 69 percent of Tennesseans think the current online sales tax process -- where only companies that have physical presence in the Volunteer State must collect state taxes from residents – is working. However, Tennessee is slated join Alabama and South Dakota as the only states to require out-of-state sellers to collect sales tax – despite U.S. Supreme Court rulings that states may demand tax collection only from businesses that have a physical presence in the state.
"Tennessee tax collectors are poised to extend their taxing powers, leaving the state vulnerable to legal challenges, and exposing Tennessee-based businesses to retaliation from other states," said Carl Szabo, NetChoice policy counsel and a scheduled witness at Thursday's Joint Government Operations Committee hearing. "Ignoring federal doctrine by requiring out-of-state businesses to collect sales tax is a killer for small businesses and a losing cause in the courts."
Only 21 percent of those surveyed were inclined to support Tennessee's proposed new sales tax regulation. Moreover, 56 percent consider the new rule a statewide tax increase, and 46 percent think it will adversely affect Tennessee businesses.
Breaking with the remote sales tax rules established by the 1992 Supreme Court decision in Quill would require small businesses in Tennessee to track and collect sales tax for 12,000 jurisdictions across the country. Giving state tax authorities the power to regulate across state lines would cripple many small businesses --placing more power and market share in the hands of big-box retailers.
The NetChoice survey further revealed that 64 percent of Tennesseans fear the new rule would encourage other states to impose similar obligations. In addition, only 22 percent support laws and rules that allow tax authorities to audit out-of-state businesses.
Additional survey details can be found at: http://netchoice.org/tntaxpoll
NetChoice is a trade association representing leading eCommerce businesses working to protect free enterprise and free expression on the Internet.
*The interactive survey of 400 Tennessee residents was conducted by Morar Consulting and has a margin of error of +/- 5% at the 95% confidence level.
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