After years of talk, Congress is moving toward possibly ending a loophole that has prevented states from collecting sales taxes on many Internet purchases.
The U.S. Senate could vote this week to approve the Marketplace Fairness Act, which would end the longstanding tax advantage enjoyed by Internet retailers like Amazon.com over their brick-and-mortar competitors.
[note: Senate advances “online sales tax” by 74-20 vote]
The proposal, which passed a test vote Monday in the Senate, would require companies with sales of more than $1 million to begin collecting sales and local taxes for purchases over the Internet.
That could mean a big windfall for the Washington state treasury – bringing in an additional $184 million for the 2013-15 budget, according to an estimate by the state Department of Revenue. That would rise to more than $567 million in 2015-17 as compliance ramps up, the state predicts. Cities and counties would also get a share – more than $278 million by 2015-17…
Your tax-free days of online shopping are numbered. If S743, also known as the Marketplace Fairness Act, becomes law, the millions of Americans who have been able to avoid sales tax online will have to start paying it. Given the broad support shown by today’s US Senate vote, some version of it is likely to come to fruition.
If the technology exists to tax people for online sales across states, then the technology also exists to allow each tax payer to elect where his or her taxes will go. That would be some real democracy in action.