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It even won backing from U.S. President Barack Obama

Legislation for the collection of online sales taxes took a major step forward in a Senate vote Monday evening. 

The legislation -- known as the Marketplace Fairness Act -- scored a big victory in a procedural vote of 74-20 Monday night. It even won backing from U.S. President Barack Obama. 

The Marketplace Fairness Act allows states to force out-of-state retailers to collect online sales taxes. Currently, states can only require merchants within their borders to collect sales taxes.

The legislation offers an exemption for merchants that generate less than $1 million in annual out-of-state revenue.

"It will level the playing field for local small business retailers who are undercut every day by out-of-state on-line companies," said Jay Carney, White House spokesman. 

Senate Majority Leader Harry Reid filed a motion in support of the new bill last Thursday. 

Many states are in favor of the Marketplace Fairness Act because the money from sales tax collection could help with financial deficits. For instance, the California Board of Equalization said it made $96.4 million in sales tax on internet commerce from September-December 2012, which is the first full quarter that the state started collecting.

Brick-and-mortar stores are also happy with the legislation, since stores like Wal-Mart and Best Buy have complained about the unfair advantage online retailers like Amazon have when it comes to the lack of sales tax collection in certain states. 

However, not everyone is in favor of the Marketplace Fairness Act. Sen. Kelly Ayotte (R-NH) strongly opposes the legislation, and plans to fight it until the end. 

"This is big retailers and big business lining up to put burdens on the Internet for small online business," said Ayotte. "It is so wrong and it is a precursor to other things they will try to grab using the Internet, including taxing the Internet."

Amazon CEO Jeff Bezos has said that he would comply with sales tax collection if there were some sort of federal legislation regarding the topic. It has been fighting U.S. states that force it to collect sales tax for years (except in Kansas, Kentucky, New York, North Dakota and Washington). Only recently has it started collecting in additional states (like Texas and New Jersey, for example). But in return, Amazon gets to create more distribution centers within these state's borders. 

Source: The New York Times

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RE: Is this even a surprise?
By Da W on 4/23/2013 7:53:12 AM , Rating: 2
People hire accountants to hide money from taxes.
Corporations hide money offshore to hide money from taxes.
People buy on amazon to save money from taxes.
Government pile on huge debt.
Is it a surprise?

RE: Is this even a surprise?
By othercents on 4/23/2013 8:24:28 AM , Rating: 4
While both statements, for Politicians spending more and causing more debt to the country and Citizens hiding their money to keep from paying taxes, are true, I see this bill more of a change due to the market shifting from local to internet businesses. The original tax law was created when there was limited interstate commerce, but now you could purchase almost anything this way and avoid the tax.

FYI. Sales Tax is a State and Local Tax, which is where they get the majority of their money. 7 states collect no income tax and only collect sales tax. New Hampshire collects neither.

RE: Is this even a surprise?
By ebakke on 4/23/2013 11:13:14 AM , Rating: 3
New Hampshire collects neither.
NH doesn't collect personal income tax. But it does collect corporate income tax. Alaska does the same thing. No personal income, no sales, yes to corp income.

RE: Is this even a surprise?
By Samus on 4/23/2013 11:50:30 AM , Rating: 2
Oregon, New Hampshire, Delaware, Montana and Alaska all don't collect sales tax.

These states also have high corporate presence, above average economies and above average quality of life in comparison to many other states. Three of them are also incredibly wealthy states with huge surpluses.

RE: Is this even a surprise?
By Phoenix7 on 4/23/2013 4:01:02 PM , Rating: 2
I thought new Hampshire had the highest suicide rate for a state? Could be wrong

RE: Is this even a surprise?
By ebakke on 4/23/2013 9:12:02 PM , Rating: 2
NH is tied for 18th. Top 10:

Rank---State---Deaths---Rate per 10k people
1---Wyoming [M] (4)---131---23.2
2---Alaska [P] (1)---164---23.1
3---Montana [M] (2)---227---22.9
4---Nevada [M] (5)---547---20.3
5---New Mexico [M] (3)---413---20.1
6---Idaho [M] (11T)---290---18.5
7---Oregon [P] (9)---685---17.9
8---Colorado [M] (6)---865---17.2
8---South Dakota [WNC] (25T)---140---17.2
10---Utah [M] (15T)---473---17.1
10---Arizona [M] (8)---1,093---17.1
18---New Hampshire [NE] (29T)---196---14.9

RE: Is this even a surprise?
By BRB29 on 4/23/2013 9:16:39 AM , Rating: 3
Economy still has not recovered and low GDP
Politicians sequestrated hundreds of thousands of federal employees to reduce spending but ended up reducing GPD, hurt local businesses tied with government, drastically reduced spending on a large number of people. Sequestration did not affect politicians but they did takes weeks and weeks of recess(vacations) fully paid.
Economy stops recovering and another hiring freeze had occurred.
Politicians sees low GPD, less tax revenue and need to raise more money.
Politicians finds more ways to tax and increase tax.
Makes tax on the one part of the economy that still creates jobs and growth.
Economy goes into further recession.
Economy still has not recovered and low GDP
Politicians sequestrated hundreds of thousands of federal employees again
Economy stops recovering and another hiring freeze again....
....and so on and so on.

RE: Is this even a surprise?
By RedemptionAD on 4/23/2013 12:23:09 PM , Rating: 3
The government is the one that made the loopholes that enables those tactics.
The don't want to fix said loopholes or adjust the tax code so it is "firm, but fair".
They pile on huge debt that they will essentially leave future generations to pay for, and one way or the other it will have to be paid.
They did it to themselves.

RE: Is this even a surprise?
By CZroe on 4/24/2013 12:27:51 AM , Rating: 2
You said it: Loopholes.

It still bugs me that online sales are considered any different than mail-order/phone sales. Online sales are just mail-order sales with the benefit of not needing a paper catalog or a cable shopping channel to show their wares and there's no need to call or mail in an order form.

Whether you are for or against taxing Amazon sales and the like, the debate should be over taxing out-of-state sales regardless of how the order was placed or if the Internet was involved. Don't threaten to tax one and not all.

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