Bill to ‘Level’ Playing Field for Online, In-Store Retailers Gains Support in U.S. Senate (April 29, 2013)
Brick-and-mortar retailers are cheering the U.S. Senate’s support of proposed legislation that would prevent some online and catalog merchants from selling goods without collecting sales tax, which traditional retailers say would level the playing field as in-store, online and mobile sales channels converge. The U.S. Senate on May 6 will vote on the Marketplace Fairness Act, which would overturn existing federal law by allowing states to require Internet and catalog retailers to collect sales tax in locations where they have no physical presence. Retailers with annual out-of-state sales of less than $1 million would be exempt.
A majority of the Senate last week gave the bill a stamp of approval, voting 74-20 to support it in a nonbinding resolution and debate showed the bill has broad, bipartisan support from lawmakers, including Sen. Dick Durbin, (D-Ill.) and Sen. Mike Enzi (R-Wyo.). The Obama Administration “strongly supports” the bill, saying it would “level the playing field” as “Internet-facilitated sales continue to grow as a share of total transactions,” in some cases depriving local governments of sales tax funding. U.S. Rep. Steve Womak (R-Ark.) introduced an identical bill in the House.
Opponents say the proposed bill would create hassles for Internet merchants operating in states with no sales tax, forcing them to institute new systems and it could force online retailers to track more than 9,000 different sales-tax regimes.
The National Retail Federation, which represents both online and brick-and-mortar retailers, supports the bill, as does Amazon.com. The Retail Industry Leaders Association (RILA), which represents more than 200 retailers, also backs the bill and said the Senate’s bipartisan support “foreshadows final passage.” The proposed legislation would move to the House for debate if the Senate votes to pass it.