The Senate on Monday passed a bill that aims to put an end to tax-free online purchases by a 69-27 vote. Dubbed the “Marketplace Fairness Act,” the bill, backed by physical retailers and opposed by some of their online rivals, would give states the ability to collect sales taxes from online retailers for the first time ever.
“After 20 years, there is finally light at the end of the tunnel for our brick-and-mortar businesses,” said Rep. Steve Womack, R-Ark., the bill’s House sponsor, according to the New York Times. “Saving local retail business depends on it, and it’s now up to the House to act.”
To this point, states could only collect taxes from Internet retailers only in the event that the retailer had a physical presence in that state. Though the bill still has to pass through the House to become law, if you listen closely, the sounds you hear are cheers and clinks of champagne glasses by brick-and-mortar retailers all across the country.
Several retail bigwigs have weighed in on the subject, including eBay, which opposes the bill.
“Complying and living under the tax laws of 50 states is a major undertaking because the process of complying with tax law goes far beyond just filling out the right forms,” Brian Bieron, eBay’s senior director of global public policy, said in a statement.
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David French, VP of government relations for the National Retail Federation, supports the measure.
“It’s time for Congress to create a level playing field so that all retailers are treated fairly,” French said.
The 800-pound online retail gorilla known as Amazon.com has supported the Marketplace Fairness Act.
“Amazon.com has long supported a simplified nationwide approach that is evenhandedly applied and applicable to all but the smallest volume sellers,” Amazon vice president Paul Misener said.
Representatives of brick-and-mortar stores have long argued that this represented an unfair advantage that tipped the scales of competitive balance in favor of online stores. While the bill has enjoyed bipartisan support in the Senate, it faces some opposition from the House, where some reportedly regard the Marketplace Fairness Act as a tax increase.
A study conducted by three professors at the University of Tennessee found that states lost roughly $11.4 billion in tax revenue last year alone due to the fact that they were unable to collect taxes on online sales made outside of their borders. Considering the nation's gargantuan budget deficit, we're not surprised that the Marketplace Fairness Act has received a healthy amount of support from a sizable portion of U.S. lawmakers.
We feel that this bill would level the playing field between brick-and-mortar stores and online retailers. What do you think? Do you consider this unfair or just? Do you object to the taxes you may soon be subjected to? Sound off in the comments below.