US Senate approves bill for nationwide online sales tax

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The Marketplace Fairness Act of 2013 has been passed by the US Senate. The bill gives states the authority to collect sales tax from online sellers — meaning sales-free online purchases could soon come to an end.

While the bill only applies to online businesses that make at least  $1 million annually, according to The Verge, online retailers are split in terms of supporting the bill. Amazon supports the sales tax bill, but eBay is arguing that it could mean “serious costs and inconvenience for small sellers,” due to the fact that they would now need to manage taxes for every state that decides to collect them.

States that would like to collect taxes from these online sellers would either need to be a member of the Streamlined Sales and Use Tax Agreement (SSUTA) or  “pass legislation that creates a central authority for tax collection, provides free tax software to online sellers, and limits the liability businesses would face if they make mistakes based on bad information from a software provider or state official,” says The Verge.

The bill passed by a margin of 69 to 27, and is now headed to the House of Representatives. The report notes that the White House has previously stated that it strongly supports the bill — making it very likely that it will be signed into law. If you’d like to read the bill’s text, you can find it at the link below.

What do you think of the online sales tax bill? Let us know in the comments!

The Marketplace Fairness Act of 2013

[via The Verge, image via formatc1]

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16 comments

  1. ttfitz

    I hope everyone commenting here realizes, this isn’t a new tax, just getting internet retailers to collect taxes that ALREADY exist. States that have sales taxes have a corresponding tax called a “use tax” which applies to purchases made out of state. You are SUPPOSED to pay these taxes yourself, usually when you pay your income tax, but most people don’t. That doesn’t mean it doesn’t exist, though.

    All this bill does is enforce already existing taxes, via collection by the online seller just like in-person sales.

  2. David Roper

    [@Prema]

    Depends how they write it. If they excude folks making less than $1,000,000 then an ebay seller would not have to report or mess with it. Amazon would. We’ll see…it still has to pass the House of Reps which is against it.

  3. David Roper

    [@SilenceIsGolden]

    Amazon is right here in SC. My wife and I went Mast Gen Store and dropped $150 plus tax while waiting for my Dr visit. The bill should exempt under a million dollars in sales (what a problem to have).

    I shopped at Office Depot because they had 8GB Flash drives for $4 Sunday. paid tax. Companies fail when they do not have anything good to sell, not because of some Mail order house in California. Sorry if I ruffle feathers, but it’s what I do best.

  4. SilenceIsGolden

    [@storageman] Totally agreed. But can you imagine trying to get a National tax or even just a nationally-collected tax off the ground with those Tea Partiers who block everything that’s federally led?
    Online tax in and of itself is totally fair. Cities are becoming ghost towns because the stores can’t afford to stay open for those people who try on stuff in a store, only to later buy it online. Online retailers already have the huge advantage of being able to just plonk down a warehouse and distribution center in the middle of nowhere, without having to pay pricey real estate.

  5. David Roper

    [@storageman]

    Bastards – not really but Strom (my SC) produced one.

    Greedy – yep. They get to do insider trading. We don’t. Heck, we don’t even get the retirement package they have, nor the medical care.

    Filthy – yep. Look at Weiner’s weener, Clinton’s Monica, Gov Sanford of my SC and his Argetinian Tail, etc.

    I agree that some taxes are worthy of being gathered, (Military and Police) but most are just for a redistibution of wealth. Kill capitalism and we don’t get PCs to play with.

  6. storageman

    I would NOT agree with the 3 words, but instead feel 99% of all elected politicians care most about re-election – which means security and power. It is all about “how many votes can I buy?” It is NOT what can we do to help the most people.
    Taxes, unfortunately, are a requirement. The real issue is how are those taxes spend and on who? Ill leads the nation in corrupt, power oriented officials. It seems that a requirement to be a top official is going to jail.
    However, the simple fact that the unionized employees bear the brunt of what union officials promised elected officials is an indication of the power abuse by lobbying government officials.
    It would be interesting to see what would happen if lobbying was out. Replace that with a 7 x 24 “survey” that discovers what is important to the majority of people.
    Not all elected officials are bad, just the majority (in my opinion)!

    The non government world of employment has experienced a dramatic change. So should government.
    Maybe we should outsource all of government to foreign countries. Heck we outsource a lot of everything else!

  7. Seamus McSeamus

    Bad idea, and I’ll bet most of the idiots who voted yes on this didn’t even bother to read it. Remember Nancy Pelosi’s famous “We have to pass the bill so that you can find out what is in it” statement in regards to the abomination that is Obamacare? That seems the be their attitude towards anything they vote on, yet somehow these worthless leeches on the taxpayers continue to be elected.

    Last I read, this was still iffy to pass the House, so there is still some hope if enough people call their representative in the US House and let them have an earful. Telephone calls work much better than emailing, IMO.

  8. David Roper

    I’m glad that it applies to companies making a Million dollars or over, but I see no earthly reason for it if the transaaction is made out of state. We have the House to stop it now if they can. Tax Tax tax – that’s all the Feds want to do now.

  9. storageman

    Since EVERY state has different rates, this law will be VERY expensive.
    Would much prefer to see a “national online tax” than a different rate for each state. Would actually prefer to see a tax code revision and simplification.
    VAT / flat tax would actually make my tax accountant happy. The 2012 tax changes are so complex, it is costing him a fortune in research to support his clients. This law will just make it harder to file returns. I can just see him having to file 50+ state returns for many of his clients. That is a pain, no matter how much automation exists!

  10. Louis

    In many (most) countries that sell to overseas customers (that is, they export), the sales tax / goods & services tax / value added tax on these exports are zero rated.

    What’s the situation in the USA regarding export sales to the rest of the world, i.e. outside the US ? Will those sales be zero rated , or subject to sales tax, and if so, what is the USA’s sales tax rate ?