Peters Invokes States’ Rights to Fight for Online Sales Tax
Published 2017-08-05 by
Cory Allen Heidelberger
State Senator Deb Peters (R-9/Hartford) skipped chairing the July 24–25 meeting of the Government Operations and Audit Committee to go fry fiscal fish in Washington. Specifically, Senator Peters testified in her capacity as the President-Elect of the National Conference of State Legislatures against the No Regulation Without Representation Act, which seeks to codify the Quill decision and make clear that states can’t collect sales tax from out-of-state online or transient vendors.
The Tenth Amendment is the cornerstone of constitutional federalism as it reserves broad powers to the states and to the people. States have used this sovereignty to enact laws protecting the health, safety, and welfare of their citizens and local businesses, as they should, as their governments are vested with that responsibility. While the Supreme Court has made clear that the Commerce Clause allows Congress to regulate interstate commerce, it has also noted that the Commerce Clause “does not elevate free trade above all other values.” Therefore, states have the constitutional right to enact laws that are not only in the best interest of their citizens and businesses, but that reflect the popular approval of their citizenries, which is the underlying value of democracy and American Federalism.
State sovereignty, or states’ rights, is not a doctrine of convenience. Rather, it’s the idea that states, and their citizens, know best how to govern themselves. All too often, members of Congress will tout the importance of “states’ rights” to justify a position on an issue, and then preempt states on other issues that don’t suit their agendas. This ideological impurity is why the American people are frustrated. Therefore, it is the prerogative, no, it is the obligation of states to remind Congress that there are 50 stars on the American flag, not 535.
The No Regulation Without Representation Act is one of the most coercive, intrusive, and preemptive legislative measures ever introduced in Congress. If enacted, this law would prove congressional indifference for the role of states in American governance. Therefore, due to its egregious nature, NCSL adamantly opposes this legislation and urges members of Congress to oppose it as well [Sen. Deb Peters, written testimony, presented to U.S. House Judiciary, 2017.07.25].
Interestingly, sponsor Rep. James Sensenbrenner (R-WI) contends the No Regulation Without Representation Act upholds states’ rights:
At its core, NRRA is about states’ rights. When the actions of one state infringes on the rights of the other 49, the overreach must be curtailed in accordance with the Constitution, which gives Congress the exclusive authority to regulate interstate commerce.
…The No Regulation without Representation Act extends this premise to its logical conclusion and forbids regulatory actions of one state that could severely limit the practices of another [Rep. James Sensenbrenner, “No Regulation Without Representation,” The Hill, 2017.05.05].
I love watching a Republican who wants more taxes battle a Republican who wants more federal regulation.
I would suggest Senator Peters gets the upper hand in this argument. Congressman Sensenbrenner would contend that South Dakota’s contested “Main Street Fairness Act” requiring online vendors to collect and remit South Dakota sales tax severely limits the tax collection practices of other states. However, one could argue that South Dakota’s requirement does not stop another state from imposing its own taxes on online vendors or exempting those vendors from local requirements, any more than the federal sales tax that Donald Trump likes a lot would stop South Dakota from collecting its state and municipal sales taxes. If a business wants to enter South Dakota’s marketplace, it has to play by South Dakota’s rules.
But there is the fundamental conflict in the Commerce Clause that Peters, Sensenbrenner, and the rest of us must resolve. To what extent do we have fifty separate marketplaces subject to state control, and to what extent do we Americans inhabit a single marketplace better controlled by federal rules?
Touche’. “I love watching a Republican who wants more taxes battle a Republican who wants more federal regulation.” The repubs have no consistency. The have situational consistency. Consistency of convenience.
Instead of thinking that one is correct; examine the premise that both Peters & Sensenbrenner are wrong.
And there are no 50 state marketplaces. Or there should not be. The founders decided that long ago. At the founding each colony, each state coined its own money. It created an economic mess. Hamilton won the argument of the times creating a national economy – victoriously over the slaveholding, self-centered southerners. The current morass of differing state, local, city taxing on national transactions is likewise an untenable mess worthy of being abolished and replaced with one equitable system. The recent Kansas experiment once again shows us the fallacy in the ‘local is better’ argument; when actually local is often more shortsighted, more corrupt.
Good point about currency, John! In that regard, the Founders laid down a very clear marker in favor of a unified marketplace.
Donald Pay
This part of Hon. Peters argument is not the complete truth: “States have used this sovereignty to enact laws protecting the health, safety, and welfare of their citizens and local businesses, as they should, as their governments are vested with that responsibility.”
Actually, South Dakota has used it’s sovereignty to require strict adherence to federal environmental regulations in a way that prevents citizens from requesting rules that are more strict than federal regulations. Thus, when South Dakota citizens see that the health, safety and welfare of their citizens and local businesses are not adequately protected by federal environmental laws, they have no recourse, except to sue. They can’t use a part of state law that allows citizens to petition for rulemaking.
This unfortunate circumstance played out during the mining controversies. Instead of citizens being able to petition for stronger state rules on water quality regulation at mines, citizens were forced to file notice of a citizens suit under federal rules to get the federal government to impose a new interpretation of federal rules at the national level. The delay caused by that process probably resulted in a worsening of the situation at the Gilt Edge Mine that ended up as a Superfund site.
There are a lot of instances where people mouth platitudes about the 10th Amendment. They don’t really mean it. If Hon. Peters means it, she might want to see about changing some South Dakota laws first.
Touche’. “I love watching a Republican who wants more taxes battle a Republican who wants more federal regulation.” The repubs have no consistency. The have situational consistency. Consistency of convenience.
Instead of thinking that one is correct; examine the premise that both Peters & Sensenbrenner are wrong.
And there are no 50 state marketplaces. Or there should not be. The founders decided that long ago. At the founding each colony, each state coined its own money. It created an economic mess. Hamilton won the argument of the times creating a national economy – victoriously over the slaveholding, self-centered southerners. The current morass of differing state, local, city taxing on national transactions is likewise an untenable mess worthy of being abolished and replaced with one equitable system. The recent Kansas experiment once again shows us the fallacy in the ‘local is better’ argument; when actually local is often more shortsighted, more corrupt.
Hear, hear Mr. T.
Good point about currency, John! In that regard, the Founders laid down a very clear marker in favor of a unified marketplace.
This part of Hon. Peters argument is not the complete truth: “States have used this sovereignty to enact laws protecting the health, safety, and welfare of their citizens and local businesses, as they should, as their governments are vested with that responsibility.”
Actually, South Dakota has used it’s sovereignty to require strict adherence to federal environmental regulations in a way that prevents citizens from requesting rules that are more strict than federal regulations. Thus, when South Dakota citizens see that the health, safety and welfare of their citizens and local businesses are not adequately protected by federal environmental laws, they have no recourse, except to sue. They can’t use a part of state law that allows citizens to petition for rulemaking.
This unfortunate circumstance played out during the mining controversies. Instead of citizens being able to petition for stronger state rules on water quality regulation at mines, citizens were forced to file notice of a citizens suit under federal rules to get the federal government to impose a new interpretation of federal rules at the national level. The delay caused by that process probably resulted in a worsening of the situation at the Gilt Edge Mine that ended up as a Superfund site.
There are a lot of instances where people mouth platitudes about the 10th Amendment. They don’t really mean it. If Hon. Peters means it, she might want to see about changing some South Dakota laws first.