Kudos to the United States Senate – with a vote of 69 to 27 the body approved a common sense bill. Now let's see if the House of Representatives follows suit.
The Marketplace Fairness Act, if passed by the House and signed by the president, will put a patch on a significant tax loophole. Currently, if an online retailer, such as Amazon or eBay, does not have physical operations in a state, that state cannot require such retailer to collect a sales tax.
This bill will allow for all states to impose such a common sense requirement.
The Marketplace Fairness Act in no way forces any state to charge a sales tax. The states which currently do not have a sales tax, five of them to be exact, will continue to remain sales tax free. Moreover, states which do currently charge a sales tax will be able to decide for themselves whether to extend such tax to online sales.
It is estimated that for those states that would take advantage of the patched up loophole, the result would be $12 billion in sales tax revenue per year. Most importantly, this would bring tax regulation closer to the 21st century and allow for the burden to be shared between those purchasing online and those shopping at brick-and-mortar stores.
Let's hope that the bipartisanship exhibited in the Senate on this issue can carry over to the House and to other fronts – from immigration to the federal budget.
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