Is there a tax increase liberals don’t like? They won’t be happy even when they own everything.
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The Senate soon will take up ill-advised legislation (S. 743) misnamed the “Marketplace Fairness Act” to authorize every state to force out-of-state businesses to serve as the state’s sales tax collector, overruling the U.S. Supreme Court’s 1992 decision in Quill Corporation v. North Dakota. As Senator Kelly Ayotte (R-NH) said on March 21, 2013, with regard to this proposed exercise of the congressional power to regulate interstate commerce:

There is absolutely nothing conservative about this proposal because, again, what this is about is officials in cash-strapped States across the country looking for new ways to plug their budget holes.

The 1992 Quill Corporation decision protects out-of-state businesses that have no facilities or employees in a state, but receive orders by Internet, mail-order catalog, or telephone from in-state customers, often called “remote sales.” The Supreme Court held that, under the Constitution’s clause authorizing Congress to “regulate commerce…among the several states,” a state could not force those out-of-state businesses to collect the state’s sales tax on remote sales. However, the Court made clear that Congress could, if it wished, pass a law to authorize the states to impose that tax collection requirement on out-of-state businesses. Thus, Senators who wish to authorize states to require out-of-state businesses to serve as their tax collectors have introduced S. 743.

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