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Wisconsin Governor Would Swap Income Tax for Remote Sales Tax

  • Jun 4, 2013 | Gail Cole

 Wisconsin governor supports online sales tax.

The Marketplace Fairness Act of 2013 (MFA) is still in The Waiting Place, biding its time in the U.S. House. While the legislation did well in the Senate--easily passing in a 69-27 vote—it may find the House Judiciary Committee to be a tougher crowd.

Governor Scott Walker (R) of Wisconsin is doing what he can to give MFA a fighting chance. In mid-May, he presented a letter in support of Marketplace Fairness to Congressmen. He wrote:

“As you consider any Marketplace legislation, I thought it would be helpful for you to have insight into discussions that have occurred between my Administration and members of the state legislature.

The Wisconsin Department of Revenue estimates that this federal legislation would result in an estimated $95 million in additional sales tax revenue annually. … I want to make clear, should federal Marketplace legislation become law, my intention would be for any resulting additional revenue [to] be used to provide individual income tax relief for Wisconsin taxpayers.”

An article in Tech Crunch notes that, while “it’s a nice gesture,” any tax relief provided by replacing a portion of income tax with remote sales tax would be negligible. The $95 million additional sales tax revenue in Wisconsin amounts to “about $16/per person, assuming it would be distributed evenly” to Wisconsin’s 5 million residents. According to Forbes, remote sales tax resulting from the Marketplace Fairness Act would cost the average American roughly $167 per year. Therefore, says Tech Crunch, “it’s a net loss.”

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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.