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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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States Desperate for Revenue
By Jim Vanus on 4/23/2013 11:47:35 AM , Rating: 2
States are desperate for revenue because they can't print money like the federal government. County and local governments face the same situation.

Whether federal, state, county or local: Governments are unable to shrink, unable to spend less, unable to rid themselves of graft & corruption, and will not be held financially accountable.

For example, in my own state:
- The most populated county in my state declared bankruptcy due to mismanagement.
- The previous mayor of the largest city is in prison due to corruption convictions.
- My hometown went millions of dollars over budget on a new jail and no one was held accountable.

Taxing Internet sales is just the beginning as state, county and local governments scramble to establish more revenues to replace the ones (such as sales & real estate taxes) that have been reduced by the declining economy.

Once these new taxes are enacted, they will never be undone. Looks like we are bound to learn the hard way what happens when uncontrollable government burdens its citizens past the breaking point.

RE: States Desperate for Revenue
By Rukkian on 4/23/2013 3:13:53 PM , Rating: 2
This is not a new tax. This is closing a loophole. Everybody was already supposed to be paying these taxes, it was just difficult for a state (or local government) to figure out how much you owe and for what.

RE: States Desperate for Revenue
By Jim Vanus on 4/24/2013 12:52:59 PM , Rating: 2
It will be a new tax for me and for many others across the country. One reason I buy online is the lack of sales tax on such purchases in my state. The reality is that I will be paying more in taxes if this law passes.

I realize that there are "fairness" arguments in favor of this tax, but it will still be a tax that many of us are not currently paying.

My main point is that all levels of government are hungry for increased revenue and will be creating new taxes and increasing existing ones until the economy stagnates or even rapidly declines.

"I'm an Internet expert too. It's all right to wire the industrial zone only, but there are many problems if other regions of the North are wired." -- North Korean Supreme Commander Kim Jong-il

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