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Online Sales Tax Bills Reintroduced in House and Senate

Bipartisan House and Senate versions have been reintroduced of bills that would allow states to collect taxes on goods and services purchased by their citizens online without regard to where the seller of the goods was based.

Both bills, the Marketplace Fairness Act (Senate) and Remote Transactions Parity Act (House), were introduced in the last Congress but got caught up in a related issue—passage last year of a bill that imposed a moratorium on state or local taxes on internet access. 

The Marketplace Fairness Act has a small-seller exemption for annual sales of less than a million, so many online sellers would not be affected. The Remote Transactions Parity Act also has such an exemption but classifies anyone with sales under $10 million a year as "small."

According to the International Council of Shopping Centers (ICSC), whose locally-taxed brick and mortar sales currently have to compete with taxless online sales, the bill in the Senate is co-sponsored by Sens. Mike Enzi (R-Wyo.), Lamar Alexander (R-Tenn.), Dick Durbin (D-Ill.) and Heidi Heitkamp (D-N.D.).

The House bill is being spearheaded by Kristi Noem, Republican from South Dakota, with four other Republicans and five Democrats as co-sponsors. 

Tom McGee, president and CEO of the ICSC, released the following statement:

“We are pleased that legislation was reintroduced in Congress this week to empower states to modernize their tax laws and provide parity to local businesses and the communities they serve," said McGee. "These important measures will fix an outdated tax loophole that currently gives online retailers a price advantage of up to 10 percent over brick-and-mortar stores, has shortchanged communities on much-needed sales tax revenue and overcomplicated our country’s current sales tax system."

State and local governments always looking for a new revenue source and to boost local businesses were pleased with the bills' return.

“We welcome the introduction of the Marketplace Fairness Act by Senator Mike Enzi and commend Representative Kristi Noem and her co-signers for introducing the Remote Transactions Parity Act. We are pleased to see an appetite on Capitol Hill to address this crucial issue, said the National Governors Association, National Association of Counties, National League of Cities, U.S. Conference of Mayors, International City/County Management Association, National Conference of State Legislatures and The Council of State Governments in a joint statement.

“We stand ready to work with the House and Senate to achieve passage of these measures and address any discrepancies during conference. Our organizations have long supported remote sales tax legislation that would ensure collection of existing sales and use taxes and level the playing field between online and Main Street businesses. “Without the ability to enforce existing sales and use taxes on remote purchases, states and lcoal governments lose billions each year, which could be used to reduce other taxes and invest in infrastructure, education, public safety and other services that improve residents’ quality of life.”

(Photo via Rock1997Image taken on Jan. 18, 2017 and used per Creative Commons 2.0 license. The photo was cropped to fit 3x4 aspect ratio.)

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.