An Internet sales tax will be implemented by the Marketplace Fairness Act if Congress has its way.
As previously reported by The Inquisitr, the Marketplace Fairness Act is supported by companies like Amazon, Sears, Best Buy, the Gap, and Barnes and Noble. eBay believes the national internet sales tax to be a bad idea. In order to become a statute the Marketplace Fairness Act would also have to be approved by the House of Representatives.
The Marketplace Fairness Act will exempt small businesses which generate less than $1,000,000 in revenue from collecting interstate sales tax. States like Alaska, Delaware, Montana, New Hampshire and Oregon do not have a state sales tax, so residents of these states won’t be charged an internet sales tax for goods shipped to their homes. But businesses based in these sales tax free states will have to collect sales taxes for items shipped to other states with sales taxes.
The Internet sales tax is also being considered a major state revenue increase, more commonly known as a tax hike. In 2012, the US Department of Commerce reported $225.5 billion in online sales, which is only expected to increase over time, perhaps doubling within six years. Congress is estimating that states would collect at least another $23 billion in taxes from the Marketplace Fairness Act.
The only reason an Internet sales tax has not been implemented yearly is because of a 1992 Supreme Court ruling that decided states don’t have the legal authority to tax sales from vendors that don’t have a “physical presence” within their borders. Some argue this gives online retailers an unfair advantage against brick-and-mortar retailers along with local mom and pop shops. Critics of this position point out the high cost of shipping, which only increases as gas prices went up, is typically much higher than state sales taxes.
What do you think of Marketplace Fairness Act creating $23 billion in internet sales taxes?