The Senate cleared the way this week for the passage of the Marketplace Fairness Act, which requires businesses with more than $1 million in Internet sales to pay sales taxes to the state where the buyer resides, Slate reported.
While a 1992 Supreme Court decision allows for taxing online sales, states don’t collect online sales tax unless the buyer voluntarily sends it.
Michael Mazerov of the Center on Budget and Policy Priorities says the Marketplace Fairness Act would make tax collections slightly more progressive, since poorer Americans are less likely to shop online, and flatten the playing fiend between online retailers and brick-and-mortar stores, which have complained of a 5 to 10 percent price disadvantage because they’ve had to charge sales taxes, Washington Post reported.
Opponents of the bill say online merchants would have to face the hassle of collecting sales taxes for all of America’s estimated 9,600 state and local taxing authorities, and that the bill favors large companies that can collect taxes online more easily, squeezing out smaller online retailers, Washington Post reported.
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