According to www.marketplacefairness.org, “The Marketplace Fairness Act grants states the authority to compel online and catalog retailers (“remote sellers”), no matter where they are located, to collect sales tax at the time of a transaction – exactly like local retailers are already required to do. However, there is a caveat: States are only granted this authority after they have simplified their sales tax laws.”
Simplifying their sales tax laws. What an amusing thought.
A B.S. in BS might make the translation of the “use tax” jabberwocky easier. Not having one, I’ll attempt to “simplify” what it means to us: Taxpayers should be paying a “use tax”, the equivalent of their home State’s sales tax on Internet and out-of-state purchases, but that’s not happening. Most taxpayers don’t know it’s their responsibility and there’s no way for the states to track it or go after it.
With the Government’s help, the burden of collecting the taxes will shift from the states to large companies. Small businesses with less than $500,000 may be exempted but the big “remote sellers” will take a hit ultimately affecting their price advantages over local sellers.
Small businesses with less than $500,000 may be exempted but the big “remote sellers” will take a hit ultimately affecting their price advantages over local sellers.
Numerous states have enacted similar MFA legislation to recoup lost “use” taxes from the big retailers, focusing on Amazon, since they currently only collect sales tax from customers in five out of the 50 states.
Amazon waged war with several of those states over it, called it unconstitutional, and terminated its relationships with affiliates in several of those states.
The battle lasted years and cost Amazon lots of money but they recently gave in and are now supporting the MFA because they figured out a way to make money on it.
Abe Gardener answered the question as to how Amazon will benefit in his recent piece online at Seeking Alpha www.seekingalpha.com:
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The House Judiciary Committee will be holding hearings on the issue in July. Most likely, it will pass—and the “use tax”, soon to be simply known as sales tax, will pass on to us.
Marketplace fairness, indeed.
June Smith is the widow WBAL talk show host and Sun columnist, Ron Smith, who posthumously received an Emmy® for his lifetime achievement in television and radio at WBAL in Baltimore, MD. Smith was a media titan in the central Maryland area and beyond for almost forty years. Mrs. Smith’s tribute website honoring his legacy is www.FriendsofRonSmith.com. She is working diligently to raise one million dollars for the Ron Smith Pancreatic Cancer Research Fund at Johns Hopkins and is an advocate for H.R. 733, the Pancreatic Cancer Research Education Act. Her email is email@example.com.