SIOUX FALLS, S.D. (KELO AM) - Senator Mike Rounds opposes a trade act called the Customs Conference Report because it prevents state and local governments from imposing sales and use taxes on internet services.
Rounds says he’s all for cutting taxes, but he also supports the 10th Amendment, providing local control and tax fairness for South Dakota businesses.
Senator John Thune helped write the Internet Tax Freedom Forever Act that Rounds opposes. Thune believes it helps prevent multiple and discriminatory taxes on e-commerce. He says it also has a four-year grandfather provision for the seven states that currently tax Internet access, including South Dakota.
Rounds says if President Obama signs the Customs Conference Report into law, in its current form with the Internet Tax Freedom Act attached to it, municipalities in South Dakota will lose $4.3 million of revenue annually. He says the state would lose out on $9.3 million annually.
Rounds says the report ignores the Market Fairness Act that allows state and local governments to collect taxes from online retailers. He says that's why the Marketplace Fairness Act allows state and local governments to recover the losses from ITFA.
On Thursday, the U.S. Senate voted 75-20 to approve the wide-ranging trade bill. President Obama is expected to sign it into law.