Online Sales Tax Bill Will Go Up For A Final Vote On May 6

By: Zach Walton - April 30, 2013

The Senate really wants the public to know that it’s completely behind the Marketplace Fairness Act, a bill that would require online businesses to collect sales tax from every state regardless of its location.

After two previous votes that saw the legislation move forward, the Senate voted one final time in favor of ending the debate on the bill. The 63-30 vote ensures that the bill will finally move to a final vote on the Senate floor. That vote won’t come for another week, however, as the Senate also agreed to delay the vote until after they return from a weeklong recess on May 6.

The Hill notes that support for the bill has dropped considerably as the Senate has rejected an open amendment process. Many senators who would be in favor of an online sales tax bill are now opposed for this very reason. That doesn’t mean that the bill will suddenly be stopped in its tracks, however, as a number of influential Senators and the White House both stand in favor of the bill’s passage.

The Marketplace Fairness Act will most likely pass a floor vote in the Senate on May 6, but the bill still has a very uncertain future. The House is hostile to any legislation that would increase taxes. The bill’s supporters will likely have to make a few compromises in the House to see it passed.

One of those compromises, suggested by Sen. Ron Wyden, may very well show up in the House. Wyden argued that states should be able to opt out of collecting online sales tax from retailers. The argument is that states sales tax should be decided by the states, and that the federal government has no right to force states into collecting sales tax.

That being said, states seem to have no problem with the legislation as many governors have voiced support for the bill. States feel that they are losing out on billions of dollars in tax revenue ever year in untaxed online revenue.

We’ll continue to follow the Marketplace Fairness Act as it heads for a final floor vote on May 6. Don’t expect any major surprises out of the Senate, but we’ll keep an eye on it just in case.

Zach Walton

About the Author

Zach WaltonZach Walton is a Writer for WebProNews. He specializes in gaming and technology. Follow him on Twitter, StumbleUpon, Pinterest, and Google+ +Zach Walton

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  • Jim Polichak from Long Island

    The fact that this is a tax increase is meaningless compared to the burden it will put on small businesses that sell on the Internet. There are about 6,000 separate sales tax zones in the United States. A “brick & mortar” store deals with one. An on-line business will have to deal with each and every one of them.

    If you figure that an Internet retailer spends just five minutes to determine if he collected sales tax in tax jurisdiction, if so, how much, and the cut and send a quarterly check to those he did he’ll end up spending 500 hours each quarter working for these tax jurisdictions for free. Two thousand hours a year! That’s a full time job in and of itself. So if a business can’t afford to hire someone to just do the sales taxes for them they’ll have no choice but to go out of business.

    Adding to the burden is the fact that each jurisdiction has its own distinct set of exempted items like food, or diapers, or medication, or clothing. For example in New York State a clothing purchase of under $100 is exempt of New York State sales tax but in many counties, town, and cities it is taxed locally. Many states exempt back to school clothes for a week or two before school starts; many do not. Another example is a pumpkin – make a pie and it’s exempt as food; make a jack-o’-lantern and it’s taxable as a decoration.

    In retail a million dollars a year is a very small business. Think of a pizza shop in your neighborhood if it sells 15 pies an hour at an average $15.00 each it’s doing a million dollars a year. And the owner most likely is taking home less than a thousand dollars a week after working 50 to 60 hours.

    This is a very bad bill. It was designed by Amazon to put tens of thousands of its competitors out of business.

  • Calmarc

    The people who are going to really benefit from this are the web developers and programmers, how is a small business supposed to know how to keep up with all of that complexity!

  • Bob Teal

    This is the craziest thing I have every heard. Brick and morter businesses do not have to file taxes with 50+ states. Only one. It is impossible for a small business to file taxes with every state. Each county has their own rules. Some tax shipping some dont. Some tax handling fee’s some dont. Do you know how many counties there are in the US. The tax rates would change each year as well. OMG we spend weeks just doing our one state tax. We would have to stop selling and talking to customers just to keep up with taxes. Our customers would not like that and they would be gone. This would put about 75% of all businesses out of business. No one has said how you should do this just that they want the money but if we are all out of business what is 5% or 10% of nothing.

  • Jerry

    Another govt law to help big or bigger businesses. Small business get penalized once again.