Marketplace Fairness Act Clears Senate Hurdle
The Marketplace Fairness Act (S. 743) has garnered 69 votes for final passage in the U.S. Senate and now moves to the House of Representatives, an action that had many retail groups celebrating.
“The current state of inconsistent sales and use tax collection in the United States makes legislation like the Marketplace Fairness Act a necessity,” noted Jennifer Hatcher, SVP of government and public affairs for Arlington, Va.-based Food Marketing Institute (FMI). “The bill simply makes it clear that states have the authority to require online retailers to collect sales and use taxes, as long as the state complies with simplification requirements designed to ease the burden of collection on retailers.”
Currently, there are two separate sets of rules governing the collection of sales taxes: one for online and one for traditional brick-and-mortar retailers. While brick-and-mortar stores are required to collect state and local sales taxes, online operators can’t be required to collect these taxes unless they have a physical presence in the state.
Added Hatcher: “Our most recent research suggests that over the next 10 years, online grocery orders will decrease overall in-store sales by 11 percent, so this legislation reflects and supports the changing retail landscape.”
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