Internet Sales Tax Bill Expected To Pass In The Senate

The Senate is expected to vote on a bill that will require internet retailers like Amazon to collect sales taxes for all of the states. The name of the bill is the “Marketplace Fairness Act” and it is expected to pass in the Senate, although it could have a tougher time making it through the House. The White House says that President Obama supports the bill. The big box stores have been pushing this for a while, but it’s really a crummy piece of legislation.

Addington explains how this would work. Take, for example, a company whose workforce and warehouses are in New Hampshire. This company has no contacts with Illinois other than taking remote sales orders over the Internet.

The Internet sales tax proposal would allow Illinois politicians to use the New Hampshire company as their tax collector. The New Hampshire company would have to collect Illinois sales tax on its remote sales to Illinois residents and send the taxes to the Illinois state government.

As The Wall Street Journal puts it, “Small online sellers will therefore have to comply with tax laws created by distant governments in which they have no representation, and in places where they consume no local services.”

Who’s hurt?

Read the whole thing.

Update: Financial firms are warning that this bill could go beyond retail.

But SIFMA and the Roundtable are concerned that the legislation could also open the door to state-level financial transaction taxes, which they have long opposed.
Scott Talbott, senior vice president of public policy for the Roundtable, said the bill could have “unintended consequences” for investors.

“A transaction tax on financial services products will hurt retail investors, retired Americans, and small businesses, effectively making it more expensive for them to invest and plan for the long-term. Without hearings, these implications and others will not be properly addressed,” he said. (Read More)

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I guess this is as good a time as any to remind you that this blog is an Amazon Affiliate and any time you make an Amazon purchase through links on this site I receive a small commission at no extra cost to you. Hurry up and shop before the politicians force them to start collecting sales tax!