National Internet Sales Tax Bill Introduced in Congress



The “Main Street Fairness Act,” national legislation that
would require online retailers collect sales tax, was introduced in Congress July
29,
according to a statement from the office of Senator Dick Durbin (D-Ill.)

Under the bill, online retailers, as well as catalog merchants and “1-800” offers on radio and television, must collect required local taxes at the point of purchase. Small businesses are exempt from the bill, with the definition of “small business” to be determined by a governing board. In addition, retailers will be compensated for the startup administrative costs associated with tax collection.

The bill was introduced by Durbin and Congressmen John Conyers (D-Mich.) and Peter Welch (D-Vt.). In the past, Sen. Mike Enzi (R-Wyo.) has supported similar measures, but no Republican co-sponsor was listed on the bill’s introduction. 

The proposal has received kudos from an unexpected source—Amazon.com, which has opposed most efforts to collect sales tax on a local level.

“Amazon.com has long supported a simple, nationwide system of state and local sales tax collection,” Paul Misener, the company’s vice president for global public policy, said in a letter to Durbin. “To this end, I am writing to thank you for your bill.”

However, another online giant, eBay, opposes the legislation, arguing in a statement that requiring small businesses to take on tax collection burdens is “unrealistic and unfair” and will tilt the field towards big companies.

Online jewelry retailer Blue Nile did not respond to a request for comment from JCK.

The bill’s sponsors called the legislation a matter of fairness that would provide local governments with much-needed revenue.

“Main street retailers collect sales taxes on behalf of consumers, why shouldn’t online retailers do the same?” said Durbin in a statement. “The Main Street Fairness Act doesn’t ask anyone to pay a single penny more in taxes. Instead, it would help governors and mayors collect taxes that are already owed.”

Many states already require Internet companies with in-state affiliates to collect sales taxes, including CaliforniaArkansasConnecticutIllinois, Rhode Island, New York, Hawaii, and North Carolina.

This issue has long been a legislative priority for Jewelers of America.

“Jewelers of America applauds the efforts to level the playing field between traditional retailers and their online counterparts with Friday’s introduction of the Main Street Fairness Act,” said CEO Matthew A. Runci.