Online Sales Tax Revision: Marketplace Fairness Act Introduced
A bipartisan group of 10 U.S. senators has introduced the Marketplace Fairness Act, which would grant states the authority to compel online retailers to collect sales taxes. The proposed legislation "seeks to both ensure that online retailers are collecting taxes while dealing with concerns raised by smaller e-tailers who claim they would be unfairly impacted by previously suggested regulations. The proposed law would exempt online sellers whose annual sales are less than $500,000," the Consumerist reported.
During the summer, Illinois Senator Dick Durbin and several Democratic colleagues introduced the Main Street Fairness Act (Shelf Awareness, August 2, 2011), but it "went nowhere," the Seattle Times wrote, calling the new measure "compromise legislation" that includes five Republicans as co-sponsors. Although the proposed bill "seeks to preempt previous opposition from online auction site eBay by exempting small online vendors from collecting the taxes," eBay's initial response did not appear to be encouraging.
"This is another Internet sales tax bill that fails to protect small business retailers using the Internet and will unbalance the playing field between giant retailers and small business competitors," said Tod Cohen, the company's v-p for government relations. "It does not make sense to expand Internet sales tax burdens on small businesses at a time when we want entrepreneurs to create jobs and economic activity.”
Amazon, however, reacted positively. Paul Misener, the company's v-p, global public policy, said, "Amazon strongly supports enactment of the Enzi-Durbin-Alexander bill and will work with Congress, retailers, and the states to get this bipartisan legislation passed."
National Retail Federation president and CEO Matthew Shay also welcomed the introduction of the Marketplace Fairness Act: "In a 21st Century retail industry, we ought to have a 21st Century system to ensure uniform collection of sales tax.... With three bills offered in just over three months, Congress has gotten the message and is ready to act. As the industry that employs one out of every four Americans, we are determined to help make this goal become reality."