Senate passes Internet sales tax bill by 2-to-1 margin
Marketplace Fairness Act, which would allow states to levy taxes on Internet purchases, now moves on to the House of Representatives for consideration.
by Steven Musil May 6, 2013 4:09 PM PDT
Follow @stevenmusil
The U.S. Senate on Monday approved a controversial bill by more than a 2-to-1 margin that would allow states to levy taxes on Internet purchases.
The Marketplace Fairness Act, which would allow states to require online vendors to collect sales and use tax on certain out-of-state purchases, was approved in a bipartisan vote of 69 to 27. The bill, which already has the support of President Obama, will now move on to the House of Representatives.
If approved, the bill would overturn a 1992 Supreme Court ruling that found out-of-state retailers generally don't have to collect taxes unless they have a sufficient business presence. The bill, officially known as S.743, does include an exception for businesses that make under $1 million a year in revenue.
Backers of the bill, including Walmart, Macy's, and Best Buy, argue that online retailers often do not collect sales taxes at checkout and thus enjoy an unfair competitive advantage over the big-box stores. The Marketplace Fairness Coalition, a group of companies supporting the legislation, says the act would "level the playing field."
Opponents say the bill amounts to a multibillion-dollar tax hike on American consumers. The National Taxpayers Union set up a petition to Congress in March that said the tax was "really just a way to unleash state tax collectors on the Internet," and 15 conservative groups also sent a letter to members of Congress saying an Internet tax law is is "bad news for conservative principles and the cause of limited government."
A fierce battle over the legislation broke out among Internet retailers in the weeks leading up to the vote. eBay CEO John Donahoe, who argued that the proposed tax places an unreasonable burden on small retailers, sent users of the online auction site an e-mail last month urging them to contact their representatives to express opposition for the bill. In his e-mail, Donahoe singled out rival Amazon, which supports the legislation.
"This legislation treats you and big multibillion-dollar online retailers -- such as Amazon -- exactly the same," Donahoe wrote in the e-mail. "Those fighting for this change refuse to acknowledge that the burden on businesses like yours is far greater than for a big national retailer."
http://news.cnet.com/8301-1023_3-57583140-93/senate-passes-internet-sales-tax-bill-by-2-to-1-margin/
P.S. Bad news; Amazon actually supports this. Saw this comment on another, similar article and this pretty much sums up Amazon's change in stance from being a staunch opponent to being one of its biggest supports:
"Amazon turned to favor online sales tax as a fait accompli; their volume demands a presence in nearly every state as Megan points out. Their conversion was undoubtedly facilitated by the realization that collection of sales taxes clearly places a formidable accounting burden on smaller online distributors, which inexorably includes most retail businesses at this juncture, brick and mortar distribution notwithstanding. The status quo seems to be the fairest "free market" approach at this point, and most conducive to entrepreneurship. If an online distributor does not have a physical presence in a particular state, they should not be required to collect that state's sales tax. Freight charges already incorporate user fees in the form of fuel taxes, vehicle registration and permits. Not to mention that requiring a distributor to collect a tax across state lines may raise some constitutional issues... "
-Barabbas
http://www.thedailybeast.com/articl...on-supporting-a-plan-to-tax-the-internet.html
Marketplace Fairness Act, which would allow states to levy taxes on Internet purchases, now moves on to the House of Representatives for consideration.
by Steven Musil May 6, 2013 4:09 PM PDT
Follow @stevenmusil
The U.S. Senate on Monday approved a controversial bill by more than a 2-to-1 margin that would allow states to levy taxes on Internet purchases.
The Marketplace Fairness Act, which would allow states to require online vendors to collect sales and use tax on certain out-of-state purchases, was approved in a bipartisan vote of 69 to 27. The bill, which already has the support of President Obama, will now move on to the House of Representatives.
If approved, the bill would overturn a 1992 Supreme Court ruling that found out-of-state retailers generally don't have to collect taxes unless they have a sufficient business presence. The bill, officially known as S.743, does include an exception for businesses that make under $1 million a year in revenue.
Backers of the bill, including Walmart, Macy's, and Best Buy, argue that online retailers often do not collect sales taxes at checkout and thus enjoy an unfair competitive advantage over the big-box stores. The Marketplace Fairness Coalition, a group of companies supporting the legislation, says the act would "level the playing field."
Opponents say the bill amounts to a multibillion-dollar tax hike on American consumers. The National Taxpayers Union set up a petition to Congress in March that said the tax was "really just a way to unleash state tax collectors on the Internet," and 15 conservative groups also sent a letter to members of Congress saying an Internet tax law is is "bad news for conservative principles and the cause of limited government."
A fierce battle over the legislation broke out among Internet retailers in the weeks leading up to the vote. eBay CEO John Donahoe, who argued that the proposed tax places an unreasonable burden on small retailers, sent users of the online auction site an e-mail last month urging them to contact their representatives to express opposition for the bill. In his e-mail, Donahoe singled out rival Amazon, which supports the legislation.
"This legislation treats you and big multibillion-dollar online retailers -- such as Amazon -- exactly the same," Donahoe wrote in the e-mail. "Those fighting for this change refuse to acknowledge that the burden on businesses like yours is far greater than for a big national retailer."
http://news.cnet.com/8301-1023_3-57583140-93/senate-passes-internet-sales-tax-bill-by-2-to-1-margin/
P.S. Bad news; Amazon actually supports this. Saw this comment on another, similar article and this pretty much sums up Amazon's change in stance from being a staunch opponent to being one of its biggest supports:
"Amazon turned to favor online sales tax as a fait accompli; their volume demands a presence in nearly every state as Megan points out. Their conversion was undoubtedly facilitated by the realization that collection of sales taxes clearly places a formidable accounting burden on smaller online distributors, which inexorably includes most retail businesses at this juncture, brick and mortar distribution notwithstanding. The status quo seems to be the fairest "free market" approach at this point, and most conducive to entrepreneurship. If an online distributor does not have a physical presence in a particular state, they should not be required to collect that state's sales tax. Freight charges already incorporate user fees in the form of fuel taxes, vehicle registration and permits. Not to mention that requiring a distributor to collect a tax across state lines may raise some constitutional issues... "
-Barabbas
http://www.thedailybeast.com/articl...on-supporting-a-plan-to-tax-the-internet.html
