The (largely ceremonial) budget passed by the U.S. Senate
Saturday included an amendment giving states more authority to
collect sales taxes on Internet purchases.
The sales tax amendment, according to
, was really designed to test support for the "Marketplace
Fairness Act," a bipartisan measure that has come to be known as
the "Amazon tax." The budget amendment passed by a vote of 75-24,
signaling possible strong support should the act come up for a
vote as a standalone law.
The Senate budget - including the sales tax amendment - has
virtually no chance of adoption - thanks to the continuing
showdown between the Democratic majority in the Senate and the
Republican-controlled House. None-the-less, many experts and
Robert Wood, believe we are moving closer to a day when sales tax
will be collected on all online purchases - not just those in
states where the seller has a physical presence.
One of the more curious developments in this ongoing debate is
the fact that Amazon (NASDAQ:
), the world's largest online retailer, supports the notion that
Internet sellers should be required to collect sales taxes - even
in states where they don't have a physical presence.
Curious that is, until one digs a little deeper. As
notes, Amazon is expanding its physical presence into more states
and would be required to collect taxes in those jurisdictions
anyway. This gives the company plenty of incentive to lobby for a
law that would force competitors with smaller geographic
footprints to play by the same rules.
All this leaves a dizzying "odd couple" juxtaposition of
proponents and opponents of the law. Supporters include
bricks-and-mortar retailers like Wal-Mart (NYSE:
), Best Buy (NYSE:
), Target (NYSE:
), and Dollar General (NYSE:
), along with online retailer, Amazon. Opponents include eBay
), Facebook (NASDAQ:
), Oracle (NASDAQ:
), and anti-tax groups including Americans for Tax Reform and
Campaign for Liberty.
Organizations like Americans for Tax Reform and Campaign for
Liberty maintain that passage of such legislation would
constitute a new type of taxation and allow states to reach
across their borders to force retailers to comply with
complicated and expensive tax laws.
Not surprisingly, proponents of the "Marketplace Fairness Act"
believe it levels the playing field, forcing all retailers to
play by the same rules. The measure, as currently written,
includes an exception for smaller online companies with gross
annual sales of less than $1 million.
The National Retail Federation, another supporter of the law,
estimates that state and local governments lose as much as $24
billion a year in taxes from non-taxed Internet purchases.
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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