The resolution (H.R. 1570) "Supporting the Preservation of Internet Entrepreneurs and Small Businesses," says that Congress should not impose unfair tax collection burdens that would hurt the U.S. economy and consumers.

The resolution is a response to legislation introduced in July 2010 by Representative Bill Delahunt (D, Mass.) which would force all U.S. online retailers across the nation to become tax collectors for states that have joined the Streamlined Sales Tax Project (SSTP).

"Don’t believe it when tax collectors say their software makes it trivial for tiny sellers to collect everyone’s sales tax," said Steve DelBianco, executive director of NetChoice.

"Small sellers will spend thousands of dollars making changes to their website software, plus endless time and accounting fees to handle exceptions, customer questions, and state tax audits."

Under the 1992 U.S. Supreme Court Quill v. North Dakota decision, the court found that the 45 state and 7,600 local sales tax systems across the country were too complicated for a retailer realistically to know how much tax to collect and remit.

Currently online retailers are only required to collect sales tax from out-of-state customers if they have a physical presence, such as a brick-and-mortar store.

"Representative Hodes and his colleagues are to be commended for standing against a national tax system that would saddle small retailers with new collection and compliance burdens," said DelBianco.

"We all support a simpler tax system, but the streamlined sales tax project has become the proverbial wolf in sheep’s clothing." 
 

Such statements peeved a lot of people, especially NetChoice, an ecommerce advocacy group. NetChoice executive director Steve DelBianco, who compared NRF exec Joe LaRocca’s remarks about the Internet causing theft to back seats causing sex, demanded a public apology earlier this week.

"There are millions of hard-working Americans who use the Internet to build a new business, reach new customers, or just to put a little extra cash in their pockets during tough times, and they play a critical role in our economy," said DelBianco

"At a time when big companies are looking to the government for bailouts, these entrepreneurs are working to create new jobs, pay their taxes, and build something for their future. They are the true innovators — the hardest working, most productive workers in the world – and they deserve better than to be labeled as addicts and criminals by the mouthpiece for giant retail chains who are afraid of a little competition."

LaRocca will not be moved, though, according to CNet:

"The testimony we submitted reflected the sentiments of many retailers that we work with," he said. "It’s not to say all sellers in online marketplaces are involved in illegal activity, however, we’re finding the ease of selling these products online is luring people into this. It’s an issue we have worked closely with law enforcement over, with successful conclusions, however, we feel more needs to be done by online marketplaces."

Sounds like he’s hooked on a feeling of a few retailers rather than hard evidence eBay and craigslist are gateway drugs. No doubt the Internet is likely a popular destination for fencers, but comparing online retailers to addicts and thieves is way across the line, and so are the proposed bills in Congress.