US Senate Passes Marketplace Fairness Act – Allows States to Collect Sales Tax on Internet Sales

Posted by at 9:10 am on April 23, 2013

The US Senate voted to move the online sales tax bill forward. The bill, known as the “Marketplace Fairness Act,” will mandate collection of sales tax for purchases even across state lines by companies having annual online sales of more than $1 million per year. The bill was passed by a 74-20 margin, greatly exceeding the 60 votes is needed for cloture.

“We’ve had a lot of innovation in the online space, but federal laws have failed to keep pace,” remarked bill supporter Sen. Mark Udall (D-CO). “Today, nearly one in ten sales occur online, it just makes common sense … the Marketplace Fairness Act is about equitable treatment for all sales.”

Opponents of the bill call it a gateway for future Internet regulation. Additionally, the $1 million threshold for tax collection is seen by those wanting to stop the bill as too low, and contrary to existing federal regulations which sets the definition of “small businesses” at sales equal or less than $30 million dollars per year.

Proponents have called it a bill to even the scales for all companies from a sales standpoint, both those with heavy Internet presences, and those without. Additionally, the bill is expected to boost state sales tax income, should the measure become law. If the bill reaches the White House, President Obama is expected to sign it into law.

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