The Marketplace Fairness Act of 2013
It was bound to happen and now it is closer to becoming a reality. The Marketplace Fairness Act of 2013, a bill introduced In February 2013, was passed the Senate in March. The bill is an attempt to level the playing field for retail, brick and mortar merchants by enabling them to compete more effectively against E-Commerce Internet Merchants who are not required to pay sales tax and use tax.
Currently, what supporters of the bill call one the largest tax loopholes in our tax code, Internet E-Commerce merchants only have to collect sales tax from a customer if that customer resides in a state where the merchant has a physical presence. This puts an end to that as it is designed “To restore States’ sovereign rights to enforce state and local sales and use tax, and for other purposes.
This bill requires that states simplify their tax codes for these type of merchants, this would be a very arduous task as there are over 9,600 separate taxing jurisdictions nationally. Opponents to the bill claim, among other things, that it would be extremely complicated and inefficient to put in place, as out of state, on line or catalog merchants would basically have to interrogate their clients to determine the particular jurisdiction and subsequent rate that would apply. They also claim the bill would actually give an unfair advantage to brick and mortar, retail merchants.
Although this bill has not yet passed the House Of Representatives and is an amendment to the 2013 budget which we still do not have, there is Bi-Partisan support and the states are pushing hard for the right to tax out of state merchants.
A copy of the Marketplace Fairness Act of 2013 can be found the website of bill sponsor Senator Mike Enzi at http://www.enzi.senate.gov/public/index.cfm/sponsored-legislation . You may also view a copy of a petition to congress by those merchants and citizens who oppose this bill at http://www.rstreet.org/policy-brief/an-open-letter-to-the-united-states-congress-oppose-the-marketplace-fairness-act/ .Tagged