The controversy over the pending Marketplace Fairness Act (S.336/H.R.684),
is dizzying. First, the big news. The Senate passed it.
See Symbolic Senate Vote Demonstrates Support For Marketplace
Fairness Act. But it really wasn’t
the Act itself but rather a budget amendment, and only in the Senate. So will
it pass?
Not necessarily, but regardless, the days of tax-free clicks are numbered. The Marketplace Fairness Act doesn’t impose a federal tax or even a new state tax. Online sellers are already required to collect sales tax from customers in their own states. But under the Supreme Court’s 1992 holding in Quill v. North Dakota, retailers don’t always have to collect.
They must collect sales tax from out-of-state customers only if they have a physical presence (store, warehouse or office) in the customer’s state. Since then, a growing number of states are extending sales taxes to online retailers with in-state sales affiliates. Amazon recently started collecting tax in Pennsylvania, Texas, California and Connecticut and according to the Marketplace Fairness Act website, is now allied with supporters of the bill.
Not necessarily, but regardless, the days of tax-free clicks are numbered. The Marketplace Fairness Act doesn’t impose a federal tax or even a new state tax. Online sellers are already required to collect sales tax from customers in their own states. But under the Supreme Court’s 1992 holding in Quill v. North Dakota, retailers don’t always have to collect.
They must collect sales tax from out-of-state customers only if they have a physical presence (store, warehouse or office) in the customer’s state. Since then, a growing number of states are extending sales taxes to online retailers with in-state sales affiliates. Amazon recently started collecting tax in Pennsylvania, Texas, California and Connecticut and according to the Marketplace Fairness Act website, is now allied with supporters of the bill.
