Sen. Jon Tester (D-MT) reintroduced Tuesday legislation designed to stop the practice of small businesses collecting online sales taxes for other states.
Tester said the Stop Taxing Our Potential (STOP) Act would overturn a recent U.S. Supreme Court decision requiring local businesses to collect sales taxes on behalf of other states when their residents purchase goods and services online, even when those businesses are located in states that don’t have sales taxes.
“Montanans have spoken, time and time again, against a sales tax,” Tester said. “This bill cuts red tape and makes sure Montana’s small businesses won’t suffer because of sales taxes in other states.”
The high court overturned decades of precedent last year by allowing states to impose a sales tax on products sold over the internet. The South Dakota v. Wayfair decision could place a burden on Montana small businesses who sell products online, potentially requiring them to collect the sales tax and send the funds to the state where the customer resides.
Opponents of the current online sales tax collection requirement said local businesses could be subjected to collecting and remitting sales taxes on behalf of nearly 9,800 state and local tax jurisdictions across the United States. Tester has been a vocal opponent of the Wayfair Supreme Court decision and originally introduced the STOP Act last June.