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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 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. 

Source: Reuters

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RE: Lies!
By Mint on 5/8/2013 12:03:40 PM , Rating: 2
I don't know why you're making such a big deal out of this. The state that the item is being shipped to gets the tax. It doesn't matter where the warehouse or middlemen are.

Look at the shipping address, charge that state's sales tax, and transfer it to that state.

RE: Lies!
By jwbarker on 5/8/2013 1:30:14 PM , Rating: 2
Not quite correct, you might try reading the actual proposed law:

In the first place, taxes must be charged for localities, not just states. This means the counties/cities/etc where the item is delivered. And, as you may know, the city listed in the mailing address often has little to do with the city the location actually belongs to. This is, indeed, a very complex problem.

On the other hand, each participating state is required to provide, free-of-charge, software which performs all of these calculations. Further, they are required to either provide 90 day notice of any changes to the rules, or forgive any errors for 90 days after the change.

A bigger problem is that these entities often charge different tax levels for different items. For example, here in Ohio, food is not taxed at all. So now, sellers must categorize each item they are selling. This might seem simple at first, but keep in mind the categories must match each and every state's laws, a much more daunting task. (and also difficult to automate.)

RE: Lies!
By wempa on 5/8/2013 2:34:43 PM , Rating: 2
Well, the text is kind of hard to read. However, if they are required to collect local taxes too, then I agree that this law is a big mess. It'd be easier to just have a flat tax on online purchases.

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