Online sales tax: Senate moves closer to Marketplace Fairness Act
According to CBS news, by a vote of 74 to 20, the Senate voted to start debate on the Marketplace Fairness Act on Monday.
Backers of the bill argue that out-of-state online retailers have an unfair advantage over brick-and-mortar stores, since they're not required to collect the sales tax owed on the products they sell -- even if the state requests it.
The National Conference of State Legislatures estimates states in 2012 lost more than $11 billion in sales tax revenue from online retailers based in other states. That money could make a huge difference in state budgets, especially as the economy continues to sputter back to life at a slow pace.
The bill has been labeled a tax grab and a bureaucratic nightmare by conservativeantitax activists, an infringement on states’ rights and a federal encroachment on the almost-sacred ground of Internet commerce.
The Marketplace Fairness Act would expand sales taxes to include sales to people in other states. If the bill were to pass, it would allow states to require online retailers to collect state and local sales taxes for purchases made over the Internet. Those companies would send the sales taxes to the states where shoppers live.
The Senate could vote on final passage of the bill this week, most likely Wednesday. That would send the bill to the House, where it may find more opposition.