Internet Sales Tax Bill Passes Senate, House Expected to Challenge It
May 7, 2013 2:31 PM
comment(s) - last by
House Speaker John Boehner now plans to deliver the bill to the House Judiciary Committee
The Internet sales tax bill
passed with flying colors in the Senate
, but the House of Representatives may prove to be more of an obstacle.
The Senate voted 69-27 in favor of the Internet sales tax bill (also known as the Marketplace Fairness Act) on Monday. The Marketplace Fairness Act would allow states to force out-of-state retailers to collect sales tax on Internet purchases -- even if the e-tailer has no physical presence in that buyer's state.
The legislation offers an exemption for merchants that generate less than $1 million in annual out-of-state revenue.
However, many e-tailers like eBay and Overstock.com oppose the new bill, saying that it would hurt small businesses.
Those who are onboard with the legislation include Amazon, which is looking to simplify its U.S. state sales tax payments, and brick-and-mortar stores like Wal-Mart and Best Buy, which have complained about the unfair advantage online retailers have when it comes to the lack of sales tax collection in certain states.
Also, state government's in need of extra revenue like the idea of the new bill. The California Board of Equalization, for instance, 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.
Back in April, the Marketplace Fairness Act scored a big victory in a procedural vote of 74-20 in the Senate. It even won backing from U.S. President Barack Obama.
While the Marketplace Fairness Act has had an easy time in the Senate, things are expected to change in the House of Representatives. The issue is that Republicans control the House, and they refuse to consider new federal revenue from eliminating tax breaks (which would be part of tax reform).
House Speaker John Boehner now plans to deliver the bill to the House Judiciary Committee.
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RE: Looking a bit closer.
5/7/2013 6:57:00 PM
I'm sure it is well thought out, after all you Americans do pay people to write this stuff, so I'm guessing they do a good job, but there are questions about this legislation that remain unanswered. Like what happens if a state decides it wants its retailers and e-retailers to comply with this legislation and then later on decides it doesn't want them to comply? There is a 90 day or a 6 months implementation time frame (well, that's what your act says), but no exiting time frame. Does this mean that once a state implements this act it can't exit from it? Or does it mean that no one thought about exiting from the agreement?
Or what happens if later on down the track a state implements a law that means it no longer complies with the requirements under which an e-retailer has to send sales taxes to other states? Does that mean e-retailers now have an option as to whether or not they do collect the extra-state sales tax, or do they still have to collect it but now have a choice about forwarding it on or not?
And what happens when an e-retailer collects sales taxes and then finds it wasn't necessary? Does the collected sales tax still have to go to the relevant state, or should it be sent to the state the e-retailer is in, or can the e-retailer refund sales taxes collected to those they have collected it from, and can it charge an administrative fee for all their wasted time before they return it?
RE: Looking a bit closer.
5/7/2013 8:53:26 PM
Your guess would be wrong.
RE: Looking a bit closer.
5/9/2013 2:31:04 PM
All good questions.
Like I said, not well thought out.
"Google fired a shot heard 'round the world, and now a second American company has answered the call to defend the rights of the Chinese people." -- Rep. Christopher H. Smith (R-N.J.)
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