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Ecommerce Developments
Federal Internet sales tax bill re-introduced
By Michelle Graff
Washington--Lawmakers in Washington again are attempting to gain passage for a bill that addresses the issue of online retailers not being required to charge sales tax when selling out of state, an effort that has been underway for a decade.
Introduced Thursday during a news conference of 53 bipartisan senators and representatives in the nation’s capital, the Marketplace Fairness Act of 2013 allows any state that is a member of the Streamlined Sales and Use Tax Agreement (SSUTA) to require remote retailers to collect state and local sales and use tax.
The SSUTA was created back in 2000 as Internet sales began to gain momentum. The goal was to simplify and modernize the sales and use tax system following the U.S. Supreme Court’s 1992 decision--a decision made well before online sales reached into the billions as they do today--that states couldn’t require sellers that don’t have an in-state physical presence to collect tax on sales into the state because the maze of local tax laws was simply too complicated.
According to the SSUTA’s website, 24 states have adopted the agreement’s simplification measures. A complete listing of the states can be found on StreamlinedSalesTax.org.
States that are not part of SSUTA can require remote sellers to collect sales tax if they adopt minimum simplification requirements, as outlined in the bill.
The bill also contains an exception for smaller online retailers, excluding remote sellers with less than $1 million in annual, nationwide remote sales from having to collect sales and use taxes.
According to a news release from the office of U.S. Sen. Dick Durbin, the 2013 bill “resolves the differences between bills introduced in the Senate and the House of Representatives last Congress.”
In the 112th Congress, which took place between January 2011 and 2013, U.S. Sen. Mike Enzi, R-Wyo., joined the Illinois Democrat Durbin and U.S. Sen. Lamar Alexander, R-Tenn., in introducing the Marketplace Fairness Act of 2011 in the Senate.
Meanwhile, in the House, U.S. Reps. John Conyers Jr., D-Mich., and Peter Welch, D-Vt., introduced the Main Street Fairness Act and U.S. Reps. Steve Womack, R-Ark., and Jackie Speier, D-Calif., introduced the Marketplace Equity Act of 2011.
None of the bills made it through Congress.
Enzi led the charge to introduce e-fairness legislation again in the Senate, joined by Durbin, the assistant majority leader in the Senate, and Alexander. Reps. Womack, Speier and Conyers led the effort on the House side.
The issue of instituting federal sales tax legislation stretches back a decade. Since that time, a number of states have passed their own versions of sales tax fairness.
The idea behind the federal legislation is to close the loophole nationwide that allows online retailers to avoid charging sales tax when selling to consumers in states where their company is not based.
It is an issue that is particularly germane for brick-and-mortar retailers in the jewelry industry, where the high-value nature of the product means that not having to pay state sales tax can make a large difference in the final cost to consumers.
Jewelers of America Director of Public Affairs Susan Posnock said Wednesday that support for passage of federal e-fairness legislation has “never been stronger.”
“The issue has real momentum and we are seeing unprecedented bipartisan support in both the House and Senate,” she said.
While JA feels there is “favorable landscape” for the bill’s passage, retailers still are urged to speak up in support of the legislation by visiting JA’s action alert on sales tax fairness.
JA is listed among the more than 200 supporters of the bill. Other supporters include Internet retail giant Amazon.com, Ben Bridge Jewelers, J.C. Penney Corp. Inc., the National Retail Federation, Sears Holdings Corp., Target Corp., The Neiman Marcus Group Inc. and Wal-Mart Stores.








