Senate Votes in Favor of Internet Sales Tax Bill
April 23, 2013 5:41 AM
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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
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
, for example). But in return, Amazon gets to create more distribution centers within these state's borders.
The New York Times
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RE: How long until?
4/23/2013 9:03:14 AM
That's very unlikely. Fast and cheap shipping is one of the most important things in the e-retailer business. The first one to move out the country would face a serious decline in sales.
"We are going to continue to work with them to make sure they understand the reality of the Internet. A lot of these people don't have Ph.Ds, and they don't have a degree in computer science." -- RIM co-CEO Michael Lazaridis
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