Go Back to www.IndependentRetailer.com NEWS Web Retailer Sales Tax?


ADVOCATES FOR a law that would require web-only retail- ers to collect state sales tax are optimistic that Congress will be enacting such legislation in the near future. While Internet retailers have benefi tted from a 1992 Supreme Court ruling that exempted them from collecting sales tax if they didn’t have an offl ine presence in the state of the purchaser, state governments and brick and mortar retailers have not. A University of Tennes- see study estimates that revenue lost to state and local munici- palities for 2012 is $11.4 billion, and the National Conference of State Legislatures estimates $23 billion is lost in new revenue


each year. Many argue that this is tax revenue that consumers should already be paying. Sev- eral organizations that represent retailers, including The National Retail Federation (NRF), are ar- guing for a level playing fi eld, where web purchases, just like offl ine purchases, are subject to sales tax. Two bills currently being


considered by Congress, the Marketplace Equity Act and the Marketplace Fairness Act, would allow state governments to require retailers in other states to collect and remit sales tax on purchases. The Marketplace Fair- ness Act requires states to create a, “Streamlined Sales and Use


Tax Agreement,” which assigns a state-level agency to collect and administer taxes, and provides a single audit and single tax return for all state and local jurisdic- tions. It also requires retailers to use the sum of state and local tax rates to determine what is owed, and tasks states with providing adequate software and services for them to pay taxes. Retailers with less than $500,000 in sales per year would be exempt from the federal act. Small retailers are also exempt


from penal-


ties for mistakes made during the tax collection process. The bill is awaiting action from the Senate’s fi nance committee. The


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