By Rob Bates
The Marketplace Fairness Act, legislation that would require online sellers to collect sales tax, was reintroduced in the Senate on March 10.
Similar legislation passed the Senate in 2013, but was never taken up in the House.
Analysts have suggested the bill will face longer odds now that Republicans control both legislative chambers.
A release stressed the bill’s bipartisan backing in the Senate; co-sponsors include Mike Enzi (R-Wyo.), Dick Durbin (D-Ill.), Lamar Alexander (R-Tenn.), and Heidi Heitkamp (D-N.D.)
Jewelers of America has endorsed the bill, arguing the current situation—where physical retailers collect sales tax but online sellers do not—puts brick-and-mortar stores at a competitive disadvantage.
The bill “would close an Internet sales tax loophole that has hurt traditional jewelry businesses,” says a statement from the group, asking industry members to contact legislators through its Legislative Action Center.
Not everyone was cheering, however. Phil Bond, executive director of the We R Here Coalition, an e-tail group, called the bill a “legislative boondoggle.”
“[It] remains nothing more than an attempt to let tax collectors loose on the Internet, tilting the playing field in favor of retail behemoths and discriminating against some of the smallest, and most dynamic, retailers out there,” he said.
Advocates of an online tax also took heart from recent comments by Justice Anthony Kennedy.
In the concurring opinion on a related case, Kennedy criticized Quill v. North Dakota, the 1992 case that prevents states from mandating that remote sellers collect tax, but opens the door for Congress to decide the question.
“When the Court decided Quill, mail-order sales in the United States totaled $180 billion [and] the Internet was in its infancy,” Kennedy wrote. “By 2008, e-commerce sales alone totaled $3.16 trillion per year in the United States … [Today] a business may be present in a state in a meaningful way without that presence being physical in the traditional sense of the term.”
He said when states can’t collect taxes from those sellers, it hurts their “education systems, healthcare services, and infrastructure.”