New Sales Tax Bill Introduced

Marketplace Fairness Act aims to simplify tax laws.

by Auctiva.com staff writer
- Nov 10, 2011

Lawmakers introduced a bill on Wednesday devised to simplify sales tax jurisdictions and let states collect sales tax from online retailers.

A bipartisan group including Sen. Mike Enzi (R-WY), Sen. Lamar Alexander (R-TN) and Sen. Tim Johnson (D-SD) and others co-sponsored the Marketplace Fairness Act, which would allow states to collect sales tax from online and offline retailers whose annual sales are more than $500,000, if the states simplify their sales tax laws.

This is the latest bill introduced into the Senate that aims to "level the playing field" between online retailers, which have to collect sales tax in some instances, and offline retailers, which always have to collect sales tax.

The Marketplace Fairness Act asks states to adopt the simplified sales tax practices noted in the Streamlined Sales and Use Tax Agreement, or to abide by guidelines noted in the bill. These include:

  • Telling retailers in advance of any rate changes
  • Having one state organization handle tax registration, audits and filing for that state
  • Using one sales tax base
  • Providing software services to help manage tax compliance

If passed, the act would apply to all states that have a sales tax in place, according to reports. eBay opposed the Marketplace Fairness Act, saying it does not provide enough protection for small businesses.

Tod Cohen, eBay's vice president of Government Relations, called the bill "another Internet sales tax bill that fails to protect small business retailers."

"[The bill] will unbalance the playing field between giant retailers and small business competitors," he says in a statement. "It does not make sense to expand Internet sales burdens on small businesses at a time when we want entrepreneurs to create jobs and economic activity."

Amazon, which has fought similar bills in the past, supports the Marketplace Fairness Act and will work with law makers and retailers to get the legislation passed, notes Paul Misener, Amazon's vice president of Global Policy. The company has long asked for simplified tax laws.


About the Author

Auctiva staff writers constantly monitor trends and best practices of those selling on eBay and elsewhere online. They attend relevant training seminars and trade shows and regularly discuss the market with PowerSellers and other market experts.

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