Gov. Haslam: Internet sales tax 'an issue of fairness'

Tennessee Gov. Bill Haslam (R) on Tuesday urged Congress to pass an Internet sales tax, which he said would allow states to level the playing field for local businesses.

"Let me be clear – I am a Republican governor that does not believe in increasing taxes," he said at a House Judiciary Committee hearing. "Tennessee is a low tax state to begin with, and we’ve been able to cut taxes over the past two years. This discussion isn’t about raising taxes or adding new taxes. This is about states having the flexibility and authority to collect taxes that are already owed by their own in-state residents."

"This is an issue of fairness," Haslam added. "Comparable businesses that sell the same things are not being treated the same. Most people I talk to understand that and agree that isn’t fair."

In 1992, the Supreme Court held states couldn’t require out-of-state online businesses to collect sales taxes because tax codes were so complex they represented an unreasonable burden on interstate commerce.

"But in the past two decades, technology has advanced more than almost anyone could have believed, and it is not only possible, but it is easy, for these businesses to collect the taxes owed just like local businesses with cash registers do," Haslam insisted.

Under the Marketplace Fairness Act, states could require online businesses to collect sales taxes. The legislation exempts sellers who make less than $500,000 in total remote sales a year. States would also have to simplify their tax systems before collecting sales taxes from online businesses.

Senate Majority Leader Harry Reid (D-NV) has said Congress had a good chance of passing the bill this year.

Watch video, uploaded to YouTube by Rep. Steve Cohen, below: