The issue the bill purportedly aims to address is the need of equal protection under the law. Currently, a state can compel a retailer to collect sales taxes only if the retailer has a physical presence in the state. This state of affairs, the MFA’s supporters , renders in-state retailers “at a competitive disadvantage” relative to out-of-state retailers. The MFA, they say, would “level the playing field.”
This is totally misleading BS, as I explain in the article.
This is an important issue with long-reaching consequences--all bad. So, read the whole thing.
I would add that liberty lovers may have an ally in the the U.S. Supreme Court.
In a 1967 case, the Court ruled that the kind of taxing authority the MFA would grant to the states to be unconstitutional based on the Commerce Clause. The Court found the imposition of state and local use taxes on national mail order house National Bellas Hess constituted “impediments upon the free conduct of its interstate business” because it could “entangle National's interstate business in a virtual welter of complicated obligations to local jurisdictions with no legitimate claim to impose 'a fair share of the cost of the local government.'” (Emphasis added.) The same reasoning could be applied to online and catalogue businesses today, so there’s good reason to believe that even if the MFA passes into law, it may not pass muster with the Supreme Court.
On a final note, some may ask: If sales taxes are abolished, how would states pay for the things the tax currently funds?
Before we answer that, we must ask a deeper question: Is the sales tax just, and in conformance with the principle of individual rights? The answer is no. The fundamental problem is the immorality of the sales tax as such. As Ari Armstrong has noted, the sales tax “essentially forces businesses to serve as the government’s tax collectors, at the businesses’ own expense, with noncompliance punishable by criminal penalties.”
So, how would states replace the "lost" revenue? To the extent that the revenue raised by sales taxes goes toward purposes not proper to government, such as funding public schools or parks, the tax is a rights-violating seizure of people’s money, and the government has no claim to that money in the first place. To the extent the revenue funds proper government functions, such as the police or state courts, it is still unjust for reasons cited above, and the government should figure out a better way to raise the revenue. (Ultimately, all taxation should be voluntary. But that is a battle for a distant future.)
Don't Expand Sales Taxes, Abolish Them by Ari Armstrong
How Would Government be Funded in a Free Society? by Craig Biddle