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Montana Attorney General Opposes Marketplace Fairness Act

  • Jun 13, 2013 | Gail Cole

 Montana Attorney General Spearheads Coalition to Stop Marketplace Fairness Act of 2013.

The Marketplace Fairness Act of 2013 (MFA) has the backing of many states. Montana is not one of the them.

During a press conference yesterday, Montana Attorney General Tim Fox announced "the formation of a coalition with other state attorneys general to oppose" the Marketplace Fairness Act. Mr. Fox is spearheading the coalition, which is researching possible constitutional problems with the bill. As of this writing, the coalition consists of the attorneys general from Oregon and Alaska--Ellen Rosenblum and Michael Geraghty respectively--in addition to Montana Attorney General Fox. Alaska, Montana and Oregon do not have state sales tax.

The three sent a letter to their state representatives, "on behalf of the remote sellers in our states," that highlights their constitutional concern with the Marketplace Fairness Act. The legislation, they argue, violates the Due Process Clause. This, they point out, Congress is not allowed to do:

"The Due Process Clause 'demands that there be some definite link, some minimum connection, between a state and the person, property or transaction it seeks to tax, as well as a rational relationship between the tax and the values connected with the taxing State.'"

The attorney generals believe that passage of the Marketplace Fairness Act will "trigger years of costly litigation for state taxing authorities and remote sales retailers as the courts define the contours of what constitutes adequate contact to satisfy Due Process." In short, they urge their representatives to oppose MFA.

Attorney General Fox has the support of the Montana Chamber of Commerce. One Montana small business owner referred to the MFA as "a gateway tax for taxing everything … over the internet and for enabling states to extend their regulatory regimes to remote entities anywhere."

Montana Senator Max Baucus (D) strongly opposes the MFA. He fought it during its tenure in the Senate, calling it "bad for business and bad for jobs," and he has vowed to "work with his colleagues in the House of Representatives to ensure the bill does not become law."

Yet the Marketplace Fairness Coalition, a group of "businesses of every size, sector and channel of product distribution, located in every state throughout the country," supports the MFA. It is, they argue, time "for Congress to give businesses clarity and certainty by allowing states to update their laws to reflect a 21st Century economy."

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.