HELENA — State Attorney General Tim Fox is teaming up with his counterparts in two other states without sales taxes to fight the Internet sales tax bill before the U.S. House.
Fox, a Republican, said Wednesday that he has led efforts to form a coalition with Attorneys General Ellen Rosenblum, a Democrat from Oregon, and Michael Geraghty, a Republican from Alaska, to oppose the Marketplace Fairness Act.
The three attorneys general contend the bill is unconstitutional because it violates the commerce and due process clauses of the U.S. Constitution.
The bill would require Montana-based businesses that sell products on the Internet to collect sales taxes from their out-of-state customers on behalf of nearly 10,000 other state and local government tax jurisdictions. The same would take place in other states.
The U.S. Senate earlier passed the bill this year, over the opposition of U.S. Sens. Max Baucus and Jon Tester, both D-Mont. U.S. Rep. Steve Daines, R-Mont., has pledged to vote against it in the House.
“Montana has a long history of rejecting a sales tax, both in the Legislature and through voter initiatives,” Fox said. “If we don’t have our own sales tax, what makes Washington, D.C., think we need to be forced to collect sales taxes for other states?”
He asked why businesses in Montana, a good-government state that historically balances its budget, should have to bail out state and local governments that haven’t been so fiscally frugal.
“Frankly, what they’re asking us to do in this bill is to be tax pushers for tax-and-spend junkies,” Fox said.
The three attorneys general will make sure members of Congress understand both the tax and its legal consequences, he said.
Supporters of the tax bill say it would level the playing field between online retailers and retail stores, allowing states to recoup several billion dollars in taxes currently owed but not collected, the Washington Post has reported.
Thirteen CEOs of Montana businesses stood behind Fox in opposition to the law.
“We sell to all 50 states from Harlowton, Mont.,” said Lance Trebesch, CEO and co-owner of Ticket River & TicketPrinting.com. “What this would mean is really a compliance nightmare. We would have to comply and collect taxes not only for the 10,000 sales tax jurisdictions that Tim mentioned, but also we would be compliant to 46 different states and their departments of revenue.”
Passage of the federal law “would literally reduce our jobs and reduce our impact on the state,” he said.
Fox was asked if he may file a lawsuit if the bill becomes law.
“We don’t threaten lawsuits,” he said. “We will certainly look at the legality of anything Congress might do, whether it’s this bill or some other bill. But we hopefully won’t get to that point.”