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The State of Online Sales Tax Legislation in 2013

  • Feb 14, 2013 | Gail Cole

 Will Marketplace Fairness Legislation Pass in 2013?

Once upon a time, Senators Richard Durbin (D-IL), Lamar Alexander (R-TN), and Mike Enzi (R-WY) presented the Marketplace Fairness Act (S. 1832) to the Senate Commerce Committee. The bill would "give states the option to collect the sales taxes they are owed under current law from out-of-state businesses… ." In short, it would close the "online sales tax loophole" that has become significantly larger since the internet retailers like Amazon.com have entered the scene. 

That bill never made it out of committee. Governors and state lawmakers converged on the capitol last December during the National Conference of State Legislatures, where they lobbied for the Marketplace Fairness Act. To no avail. There was a rumor that marketplace fairness would be included in the 2013 National Defense Authorization Act last December, but it wasn't. And so 2012 came and went.

Yet the champions of marketplace fairness have not given up. Senators Enzi, Durbin and Alexander "plan to join House Republican and Democratic counterparts to unveil" a compromised measure today at 2:15, EST. Few details have been released, though the word is there will be "an exemption for online sales that fall below a certain threshold."

Some lawmakers are concerned that an online sales tax would be perceived as a new tax, and they're reluctant to vote for that. While many state legislators and governors support Marketplace Fairness, others, like Mississippi Governor Phil Bryant (R), do not. Furthermore, Marketplace Fairness is not at the top of the agenda for many lawmakers. Guns and immigration have center stage these days.

But advocates for Marketplace Fairness are numerous, and support is strong. Indeed Amazon.com, the world's largest online retailer, is lobbying for marketplace fairness. The senators from Illinois, Tennessee and Wyoming have been working for legislation to allow states to collect remote sales tax since 2011. Dow Jones Newswires reports that they're working for it still.

Is your business ready for remote sales tax?

photo credit: alles-schlumpf via photopin cc

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.