States sales tax collectors, get ready. A bipartisan group of Senators this week introduced legislation they say would level the playing field among online, catalog and bricks-and-mortar retailers.
Sens. Mike Enzi (R-Wyo.), Dick Durbin (D-Ill.) and Lamar Alexander (R-Tenn.) say their bill, the Marketplace Fairness Act, would give states the option of collecting sales taxes they are owed under state law from out-of-state businesses.
Currently, the states must depend on consumers to pay those taxes via state use taxes.
The Senate bill is similar to the Marketplace Equity Act introduced in the House in October.
The Senate's online sales tax measure, like the House version before it, represents a move toward the inevitable collection of state sales taxes by remote sellers, dubbed Amazon taxes. And that earns it this week's Follow-up Friday honors.
The bill would streamline the more than 7,500 sales tax jurisdictions nationwide and give them two options by which to collect the estimated $23 billion a year in sales taxes from online and catalog purchases.
"For over a decade, Congress has been debating how to best allow states to collect sales taxes from online retailers in a way that puts Main Street businesses on a level playing field with online retailers. This bill empowers states to make the decision themselves," said Enzi. "If they choose to collect already existing sales taxes on all purchases, regardless of whether the sale was online or in store, they can. If they want to keep things the way they are, it's a state's choice."
Wanna bet what choice most state tax departments will make?
"If I were president of an online retailer, I would look at this week in Washington, D.C., and I'd make my plans to start collecting sales taxes wherever I sold things in the United States," said Alexander.
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