The Senate Democrats are about to consider voting on a sales tax imposed on Internet purchases.
The bill was released for the Senators to read only on April 21, Sunday. Harry Reid — Sen. Don’t Read — has it on a fast track.
The bill is S. 743, the Marketplace Fairness Act. In this case, “fairness” means “customers should pay more. That’s fair.” This includes customers in states that have no sales tax. They will if this bill becomes law.
If the House votes for it, the law will impose sales tax collection requirements on any U.S.-based firm that sells anything out of state. If the company sells $1 or more a year, it becomes subject to the tax.
Companies located outside the U.S. will not have to pay. The law cannot be enforced outside the USA.
This means that consumers will be charged to buy items sold by firms that have no physical presence in their states.
This is just one more tax. The White House supports it. This is President Obama’s position.
Although States presently have the authority to tax the sale of goods or services sold from out-of-state vendors, they are prevented under current law from requiring the collection of such duly-enacted taxes. As a consequence, while local small business retailers follow the law and collect sales taxes from customers who make purchases in their stores, many big business online and catalog retailers do not collect the same taxes. Because these out-of-state companies are able to play by a different set of rules, this disparity undermines the ability of cities and States to invest in K-12 education, police and fire protection, access to affordable health care, and funding for roads and bridges. This bill would eliminate the unfair advantage currently enjoyed by big out-of-state online companies over local neighborhood-based small businesses.
In recent years, collection technologies have improved and States have made significant strides to cut red tape and simplify their tax systems. At the same time, Internet-facilitated sales continue to grow as a share of total transactions, contributing to ongoing State budget pressures. In recognition of these developments, a broad and growing group of bipartisan State and Federal leaders — including governors, mayors, business and labor groups, and members of Congress from both parties — has called for commonsense Federal legislation to make the system more fair.