A new bill making its way through Congress would, if passed and signed into law, grant states the authority to require online and catalog retailers (“remote sellers”), no matter where they are located, to collect sales and use taxes at the time of a transaction — exactly like local retailers are required to do.
The “Marketplace Fairness Act of 2013” (S.336, H.R.684) was introduced by Rep. Steve Womack (R-AR) and assigned to a congressional committee on Feb. 14, 2013, which will consider it before possibly sending it on to the House of Representatives or Senate. Click here to follow the progress of the bill.
Before states could be granted this authority, however, they would be required to simplify their sales tax laws because two Supreme Court rulings cite concern that collecting sales tax for multiple states would be too difficult for the retailers. The bill, however, providesretailers with free software to help them comply. States seeking collection authority have two options for simplifying their sales tax laws.
The National Retail Federation (NRF), a retail trade association based in Washington, D.C., has expressed support for the Marketplace Fairness Act, saying the bipartisan legislation indicates progress on the passage of sales tax fairness legislation.
“Fortoo long, local retailers and small-business owners have been saddled with a competitive disadvantage with online retailers – sales taxes,” says David French, the senior vice president for government relations at the NRF. “This sales tax disparity hinders community-based retailers, hurts Main Street jobs, and has [led] to a $24 billion loss for state and local governments. It’s time Congress allows all retailers to compete on the same playing field.”
Click here to read the text of the bill.
GovTrack, a website that helps the public research and follow legislation in the United States Congress and the state legislatures, predicts that this bill has only an 8 percent chance of getting past committee and only a 2 percent chance of being enacted.
For even more information about the Marketplace Fairness Act, click here.
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