E-Sales Tax: Congress Continues Debate

E-Sales Tax: Congress Continues Debate - Quicken Loans Zing Blog You may recall my blog a couple weeks ago about the potential for a new e-sales tax. Well, yesterday the House Judiciary Committee held a hearing on the Marketplace Equity Act, a proposed bill that, if enacted, would allow states to require online retailers to collect state taxes at the point of purchase. As it stands, most states require citizens by law to pay taxes on all non-exempt purchases made within the state, including those purchased online. That’s right, when you’re done with that Amazon shopping spree, you’re required to keep record of all those purchases and claim them come tax time – though few people do.

Until now, online retailers have avoided charging these taxes, giving them, some say, an unfair advantage over the brick-and-mortar stores that have no choice but to collect taxes at the point of purchase. Yesterday’s hearing showed that the bipartisan support for this bill makes its enactment seem inevitable.

According to MarketWatch, several members of Congress, on both sides of the aisle, voiced their approval of these efforts, including co-sponsors of the bill, Congressman Steve Womack (R-AR) and Congresswoman Jackie Speier (D-CA).

Governor Bill Haslam of Tennessee, a Republican who supports the bill, said, “We’re trying to help a nation of people right now who are breaking the law by not paying their taxes.” However, there are plenty of opinions to go around. Those in opposition of the bill say this federal approach overshoots the target, noting that retailers should instead charge “origin-based” taxes within the states that they conduct their business. With this model, if an online retailer has a physical presence in Michigan, let’s say, then they should only collect sales tax from their customers who are Michigan residents.

There may be those who frown at the idea of the e-sales tax, but there are those who think the bill will, and should, pass through Congress.

President and CEO of the International Council of Shopping Centers (ICSC) Michael Kercheval said, “We are encouraged by the hearing by the House Judiciary Committee.” He added, “It demonstrates that there is real bipartisan desire to end the practice whereby the government picks winners and losers in the marketplace. We urge the Senate Commerce Committee to build on the growing momentum to level the playing field for all retailers across the country.”

So, as it stands, there’s plenty of forward momentum with both this bill and the Marketplace Fairness Act in the Senate. We’ll keep you updated with more news on this as it develops, but in the meantime, how do you feel about the prospect of this e-sales tax? Would it affect the way you shop or conduct business?

 

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