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Monday, October 28, 2013
Over the past 20 years, the Internet has radically changed both the global and U.S. economy. It has expanded markets in ways the central planners never could and has created more entrepreneurs than all of our nation’s business schools have — combined.
The Internet has allowed American consumers and entrepreneurs to gain access to the global marketplace, first from their computer and today also from their phones, tablets, smart watches and even eyeglasses. Small businesses now have the ability to reach consumers virtually anywhere in the world.
I know this firsthand because the opportunities and access allowed by the Internet, simply put, changed my life. In 1999, I started a business out of my one-bedroom rental apartment called New Media Strategies, which became the first social media marketing company in the world. I’m proud to say this Virginia-based business not only pioneered a brand new industry but also has employed hundreds of people over the past 14 years.
I believe in equal opportunity — not in equal outcomes.
I believe that everyone in the commonwealth should have the same opportunity to start and grow a business. That’s why I commend Rep. Bob Goodlatte for laying out principles that work to ensure equal opportunity, standing in stark contrast to those attempting to increase taxation and regulation through legislation before Congress with the unfortunately misleading name of the Marketplace Fairness Act.
Goodlatte, after long deliberation, put forward a path for legislation that would continue competition and opportunity for small businesses. These principles reject forcing small businesses selling goods online to collect and remit sales taxes in every locality and state where their products are sold, overturning a common sense Supreme Court precedent known as the Quill decision. In 1992, the court ruled that forcing out-of-state sellers to collect sales taxes in states where they have no physical presence would constitute an undue burden on retailers and commerce in general.
Big retailers, threatened by the rise of smaller, more nimble operations, are now calling on Congress to override that Supreme Court case through the so-called Marketplace Fairness Act.
If they succeed, even the smallest online retailer might have to track and comply with ever-changing sales tax rates for nearly 10,000 state and local jurisdictions across the nation. That would be like forcing Wal-Mart, or your local hardware store down the road, to “card” every customer, find out where they live, charge the sales tax from that locale, and then send the money back to that other government, wherever in the U.S. it might be.
Most small businesses handle their own accounting, and even if software could simplify the collection of the taxes, there is still the burden of actually preparing and filing monthly and/or quarterly tax reports, remitting the correct amount with each return, running the risk of penalties for even innocent errors, and the increased exposure to audits.
So, who exactly are these small businesses? Sure, some are high-tech start-ups, but more often than not they are “mom and pop” shops found in small towns across the country. Many online retailers own their own warehouses, offices, storefronts and commercial property in communities around the country. They employ local members of their communities who then spend more money in their local economies. More so, they are a huge source of jobs growth for our county in a fairly dismal economy.
While a candidate for statewide office here in Virginia, I was proud to sign a letter with my fellow candidates, along with the two candidates running for the Republican nomination for attorney general, opposing the Marketplace Fairness Act.
In the letter, we stated: “We all know that small business owners already face more than enough obstacles in their efforts to build successful business models. This new tax that Washington and some in the commonwealth are pursuing must be stopped.”
I stand by those words and encourage all members of the Virginia congressional delegation to stand with Goodlatte.
The Internet has offered tens of thousands of Americans a way to work for themselves and create jobs in this economy. This amazing online marketplace has allowed retailers here in the commonwealth of Virginia to sell their great products across the country and around the world and has drastically reduced prices for all consumers. More taxation and regulation of the Internet will stifle growth, increase prices and cost us all valuable jobs. It’s time to tell Washington, “Don’t tread on the Internet.”
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