The “Main Street Fairness Act” that has been causing affiliate members to be left in the cold at the state-level was introduced to the federal level last time we mentioned it here. Today, a similar bill was introduced as the Marketplace Fairness Act to the Senate with four senators support across both parties, Senators Mike Enzi (R-WY), Dick Durbin(D-IL), Lamar Alexander (R-TN) and Tim Johnson (D-SD). Senators John Boozman (R-AR), Jack Reed (D- RI), Bob Corker (R-TN), David Pryor (D-AR), Roy Blunt (R-MO), and Sheldon Whitehouse (D-RI) have also joined the senate bill’s introduction as cosponsors.
Amazon emphasized their support of the bill with a press release today:
Amazon.com, Inc. (NASDAQ: AMZN) today confirmed its strong support for the federal bill introduced this morning by United States Senators Enzi, Durbin, and Alexander, that would create a constitutional framework for collecting sales tax online.
“Amazon strongly supports enactment of the Enzi-Durbin-Alexander bill and will work with Congress, retailers, and the states to get this bi-partisan legislation passed,” said Paul Misener, Amazon vice president, global public policy. “It’s a win-win resolution – and as analysts have noted, Amazon offers customers the best prices with or without sales tax.”
If enacted, the Enzi-Durbin-Alexander bill will allow states to require out of state retailers to collect sales tax at the time of purchase and remit those taxes on behalf of customers, and it will facilitate collection on behalf of third party sellers. Thus, this bill will allow states to obtain additional revenue without new taxes or federal spending and will make it easy for consumers and small retailers to comply with state sales tax laws.
The Retail Industry Leaders Association sent a letter to show their support of the bill.
“A true free market is devoid of government preferences and special treatment,” said Katherine Lugar, Executive Vice President for Public Affairs at the Retail Industry Leaders Association. “The Marketplace Fairness Act will get government out of the way, restore the free market and close the loophole that has given an unfair advantage to online retailers like Amazon.com for over a decade.”
“Support is growing for a bipartisan solution that levels the playing field for all retailers and gives states the authority to control their own sales tax structure,” said Lugar. “This legislation is one part fairness and one part states’ rights—it just makes sense for Congress to act.”
Not everybody is in favor of the bill, however. The Computer and Communications Industry Association, a trade group that represents eBay, Google, Microsoft, and Yahoo amongst its members, doesn’t like the bill. It applauded a bill introduced last week to prevent Congress from giving States the power introduced in today’s bill.
“It is extremely heartening to know that there are those in the Senate, as well as the House, who are willing to stand up in support of innovation and entrepreneurship against retrogressive measures that would draft online vendors into service as remote sales tax collectors.”
What might this mean for you?
- With this bill giving control to states to charge sales tax, websites like Amazon will likely start charging sales tax, meaning consumers will have to pay more.
- This should mean you mostly won’t have to pay a use tax to your state at the end of the year, meaning their is no net increase.
- States will get the money “due” them and may improve their budget situations.
- States are required to simplify their sales tax rules in order to adopt the new rules, so it may reduce the headaches for businesses in-state and other businesses out-of-state.
- If the bill passes and is implemented in your state, a purchase would cost the same online or on main street, so local businesses might see a boost. (This will probably be a muted effect since price is hardly the only benefit to online purchasing.)
- If you or your company depends on affiliate revenue streams and your state has passed an “Amazon Tax” law but adopts the proposed federal method, you may get reinstated in the affiliate programs that were terminated upon the state passing those laws.