The U.S. Senate has just passed The "Marketplace Fairness Act" (S.336), which now goes to the U.S. House of Representatives (H.R. 684). This legislation - which unconstitutionally violates the American principles of territorial jurisdiction - would force small businesses that sell products online to collect and report sales tax in 45 states, and subject business owners to penalties, fines and even prison sentences for any mistakes.

At a time when government should be encouraging business growth, this nightmare legislation will effectively shut down every small business that doesn't have the resources to deal with 45 separate tax codes, tax collection agencies, and sets of tax laws. Potentially, this law could be expanded to apply to individuals selling items on sites like eBay and Etsy.

This legislation is supported by Wal-Mart, Amazon.com and other large retailers that would benefit from driving small vendors out of business. It is also a "bipartisan" effort in Congress, meaning that legislators on both sides of the aisle would rather see thousands of small businesses be regulated out of existence than allow them to operate without becoming extra-jurisdictional tax collectors.