Big sales aren’t the only thing attracting lots of attention to the busiest online shopping day of the year. A broad coalition of businesses and lawmakers are working to advance legislation during the lame duck session that would make this the last year Cyber Monday shoppers largely avoid paying sales taxes on their purchases.
The Hill reports:
Under current law, states can only collect sales taxes from retailers that have a physical presence in their state. People who order items online from another state are supposed to declare the purchases on their tax forms, but few do.
The Marketplace Fairness Act (MFA), authored by Sens. Dick Durbin (D-Ill.), Mike Enzi (R-Wyo.) and Lamar Alexander (R-Tenn.), would empower states to collect taxes on online purchases. The bill exempts small businesses that earn less than $500,000 annually in out-of-state sales.
The National Retail Federation, which advocates for millions of retailers of all sizes, has come out in strong support of “sales tax fairness”. From the NRF Retail Means Jobs website:
It’s time to level the playing field so all retailers — no matter which channel they sell in — can remain competitive. While a number of states have passed their own legislation attempting to address the issue, NRF believes the solution to sales tax collection must be mandated by federal law; be fair and apply to all sellers; and be flexible enough for states to adopt and sellers to comply.
Those opposed to the legislation including ecommerce giant eBay Inc. cite concerns that MFA will actually raise taxes and further complicate the tax code and burden on small businesses in particular:
eBay believes that including a robust small business exemption in any Internet sales tax bill is critical to ensuring small businesses play an important role in the Internet marketplace. Therefore, eBay Inc. opposes any attempts by Congress to pass legislation that does not include robust protections for small businesses across the country.
According to research firm comScore, Cyber Monday sales will hit $1.5 billion in 2012 , up 20 percent from 2011, so it’s clear there’s a great deal at stake and advocates from both sides of the issue will working hard to make their case before lawmakers and staff on Capitol Hill. If you’d like to take a break from shopping to show your support for either side of this issue, you’ll find NRF’s grassroots advocacy page here, and the corresponding eBay effort here.
What do you think? Should Congress enact a national Internet sales tax? Tell us why or why not in the comments below.
