Senate Passes Internet Sales Tax Proposal

by Nate Wooley | May 7, 2013 12:17 pm

NewLetters[1]Yesterday, the U.S. Senate passed the Marketplace Fairness Act that requires online retailers to collect state sales taxes.

The measure — which passed the Senate 69-27 — gives the individual states the authority to require online retailers to collect and pass along state sales taxes, Bloomberg reports[2].

Previously, online stores were only required to collect sales taxes in states where they had a physical location. Therefore, the majority of companies collected — and passed on to the states — only a small fraction of possible taxes. This has drawn protests for years from brick-and-mortar retailers who argue that it places them at a pricing disadvantage against their online rivals.

Opposition to the bill — spearheaded by eBay (NASDAQ:EBAY[3]) — is strong. Members of the House of Representatives from states with no sales tax and those with a significant number of online businesses oppose the measure. Speaker of the House John Boehner (R-OH) has declined to comment on whether the House will take up the bill in the current session.

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