A Senate bill aimed at collecting online sales taxes is gaining support from retailers, including onetime critic Amazon.
Introduced by Sen. Dick Durbin (D-Ill.), the Marketplace Fairness Act would allow states to compel Internet retailers to collect sales taxes, a notion that Amazon has vigorously opposed in the past. If approved, the bill would overcome a longtime ban on forcing retailers to collect sales taxes in states where they do not operate stores or claim any kind of physical presence.
Uncollected taxes amount to an estimated $23 billion a year, according to the Chicago Sun-Times. Amazon battled individual state efforts to collect sales taxes and had argued for uniform, national standards. The e-tailing giant has changed its tune in recent weeks, however. “Amazon strongly supports enactment of the … bill and will work with Congress, retailers and the states to get this bipartisan legislation passed,” Amazon VP of global public policy Paul Misener said in a statement.
Not all Internet retailers are on board. EBay has criticized the new legislation as potentially harmful to the pricing competitiveness of its small member vendors. In addition, NetChoice, a lobbying group representing online companies, has voiced concern over the complicated compliance efforts related to dealing with each state. Steve DelBianco, NetChoice’s executive director, told the Sun-Times, “Small online retailers are right to fear the costs and compliance burdens of this proposal.”
Internet and catalog retailers have been exempt from sales taxes in states where they do not have a physical presence, per a 1992 Supreme Court ruling. Since then, individual states have endeavored to get around that decision to take advantage of the billions of dollars that go uncollected each year. If this latest federal legislation gets approved, it’s a good guess that it would still face an uphill battle in the federal court system.
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