Senate Expected To Vote On Net Sales Tax Bill

The Marketplace Fairness Act was introduced only last week, but the Wall Street Journal notes that a vote is expected in the Senate on the bill as soon as today.

The bill’s detractors say its interstate coverage may discriminate against smaller businesses, and online stores in states that charge no physical sales tax. Its introduction is ostensibly to make online selling fairer because it would face a sales tax burden that places online stores on a more even footing with bricks and mortar stores and thus make it harder to undercut prices that physical stores have to charge. Ironically Amazon is said to support this bill, after long resisting campaigns to get the retailer to pay sales tax.

But the Wall Street Journal quotes cases like New Hampshire which has no sales tax, but under the proposed law a NH-based online retailer would have to bear the burden of collecting online sales tax and pay it to states where it is levied. New Hampshire Main Street stores wouldn’t have the same burden, even if a walk-in customer came from a state where sales tax is levied.

Is a Net sales tax an inevitable event? Or is it horribly unfair and unlikely to do anything to boost competition and thus customer benefit?KE