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Online sales tax gets reintroduced in Congress

Photo of Betsi Fores
Betsi Fores
The Daily Caller News Foundation

A bipartisan online sales tax bill called the Marketplace Fairness Act was reintroduced in Congress Thursday.

Illinois Democratic Sen. Dick Durbin filed the legislation along with Wyoming Republican and Tennessee Republican Sen. Lamar Alexander.

The bill has widespread support from both from the National Retailers Federation, other brick-and-mortar trade groups and the online superstore Amazon, which previously opposed the measure  measure.

“This sales tax disparity hinders community-based retailers, hurts Main Street jobs, and has lead to a $24 billion loss for state and local governments,” National Retail Federation Senior Vice President for Government Relations David French said in a statement following the introduction of the new bill. “As e-commerce and m-commerce continue to increase in market share, it’s time Congress allows all retailers to compete on the same playing field.”

The bill is presented as a way to close the loop hole on goods purchased online. Currently, sales tax is only paid online when the store that a good is purchased from is located with in the state it is being sold. If passed, this bill  require sales tax be collected on all goods purchased online.

Many state governors and state legislatures, looking for new forms of revenue, are clamoring for the passage of this bill, Republicans and Democrats alike.

Meanwhile, online vendors, including eBay,  and Internet freedom groups strongly oppose the new bill.

“[T]his bill would create an expensive and onerous new tax regime for any business that uses the Internet or catalogs to reach customers around the country,” Steve DelBianco, the Executive Director at NetChoice, wrote of the new proposal.

Durbin’s bill would exempt companies that do business online but collect less than $1 million in revenue — an increase from $500,000 in his bill from the previous Congress.

“The $1 million exemption level in this legislation isn’t even enough to cover a mom-and-pop retail operation. In fact, the states’ own study showed that retailers under $1 million in sales already spend seventeen cents for every tax dollar they collect for states,” DelBianco adds.

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