The measure, dubbed the Marketplace Fairness Act, has split the business community with fierce lobbying on both sides. President Obama gave the bill his backing before Monday’s vote, and 26 Republicans supported it.
“We have heard overwhelmingly from governors, mayors and the business community on the need for federal legislation to level the playing field for our businesses and address sales tax fairness,” Jay Carney, Obama’s press secretary, said Monday.
Brick and mortar retailers and their business associations say Internet sellers have an unfair advantage, The Hill reported. But the Internet auction giant eBay is lobbying against it, saying it would hurt people running small online businesses, and the Securities Industry and Financial Markets Association and the Financial Services Roundtable say it would allow states to tax securities transactions.
Heritage Action, Americans for Prosperity and FreedomWorks, all conservative groups opposed to tax increases, have said they will score votes for the bill against lawmakers.
The Senate is expected to take a final vote on the bill later this week. If it passes, it will go to the House where the Republican majority is likely to kill it.
Copyright 2013 United Press International, Inc. (UPI).
it would be different if they were to lower the current tax to %5 to offset the increase but all it comes down to is more money for the state.
What tax increase? There is no tax increase. The tax has always been there. They are just going to enforce collection.
No, the new law is to collect more money. If it was for enforcement they would simply enforce it.
The state laws call for the buyers to pay the tax to their own state. The buyers don’t do it. There needs to be a federal law to make all sellers in the nation to collect it and remit it to the proper states because the State of Iowa has no control over a seller in Minnesota.
So now it IS all about the money?
It’s about paying what you owe and not ignoring the law. If people paid what they owed as they were supposed to, there wouldn’t need to be a federal law! It is about so many different issues. Unless you are a business that has to compete with Internet sales, you would NOT understand it. You not only have to lower your prices to compete with the Internet price, you also have lower your price farther in order to pay the sales tax for the consumer. It eats into your profit MORE than the Internet seller because they already buy the product a lot cheaper. Local businesses could raise prices up to 6%, hire more workers, and inject more money into the states’ economies. Also, the states will have more money to make improvements to infrastructure, NEW PRISONS, hire troopers, improve education, or whatever.
The State of Iowa should have been putting articles in the paper every year starting in December that use tax is due on Internet and catalog purchases with your state income tax return. There should also have been a form included with every tax return for computing your use tax on out-of-state purchases. Every tax preparer should have been asking each taxpayer for a total of taxable purchases. The State has dropped the ball as far as collecting this tax and getting its deserved share of income.
The other thing that is not fair is that businesses have been getting audited and penalized for not paying use tax. If they are enforcing this tax on businesses, they should also enforce it on consumers. It is not fair to apply this law on only one sector of taxpayers. Businesses already pay a higher rate of property taxes. If they are going to audit businesses to make sure they pay this tax, then they need to audit consumers. This law has not been administered fairly in the past!
Which would be cheaper? Having the states audit each consumer for compliance or having the federal government pass a bill enforcing collection and remittance of use tax to all the states?
@Katie-Question-Why does the internet business purchase wholesale goods an cheaper than local business? Is it because they too are buying their goods on line? Or is it just lot size that allows them to purchase for less money? Just asking.
Again your first paragraph is all about more MONEY.The State collecting a larger piece of the pie.
You wail about fair but you forget the the internet business has to pay or charge the shipping cost. I don’t hear you wailing about that. Lets be totally fair lets make both prices equal, the internet vs the local. And instead of lowering the price we charge the larger of the two, and let the State collect the excess. Think of all the PRISONS and infrastructure that would raise. You wail about what all the taxes could do, all the people it would hire (seriously the only people hired are tax agents) but you forget about the people hired by the internet businesses. But of course its all about the local business.
Your third paragraph wails about the fairness of tax audits, do you believe that the internet businesses are not subject to the same audits.
Again why would anyone spend MORE for a product vie shipping? Again the local dealer will not/can not get the wanted merchandise.
@LVS: Yes, most Internet businesses can buy in big lots compared to small local businesses. They can sometimes sell items as cheaply as we can buy them! We can’t compete with some items.
@ JDC: The businesses we compete with have free shipping over $25 and most items we sell are over $25. The trend on the Internet is free shipping on most sites, or haven’t you noticed?
Internet businesses would have to perhaps hire another person to keep track of the taxes on their various states’ sales. Job creation for them, too. And of course, Internet businesses should be subject to the same sales/use tax audits as everyone else! This would eliminate the need for consumer tax audits in each state. Obama will be very happy because that will create more gubment jobs in all states. The increased revenue from use taxes will also create more gubment jobs in all states. That should make Democrats everywhere happy.
Yes, there are certain things you cannot buy locally and I love to shop on the Internet. However, I firmly believe we should all be paying 6% use tax on those items. It is the law now and it needs to be enforced. Our state needs that money. Businesses have to pay it and consumers should also have to pay it. It’s only fair! I think if this doesn’t pass, businesses should do something to force the State to collect the tax from consumers so the law is applied equally. Do you think it would be fair if only residential property owners had to pay real estate tax and they ignored the law that business property owners were supposed to pay it? Na, I didn’t think so…..
This is not a tax increase!!! If you have not been sending 6% use taxes to the State of Iowa every year with your state income tax return on the purchases you made out of state on the Internet or from catalogs in the previous year, you have been breaking the law. Plain and simple. It is merely a way to enforce the laws that have always been in place.
Businesses get audited for not paying use tax on purchases made out of state. We HAVE to remit tax on them or we get fined. Why should businesses be the only ones paying this tax when the consumers skate? It’s about time everyone ponies up.
Also, how can a small local appliance dealer compete with some large online dealer who doesn’t charge sales tax? Not only does the big Internet guy buy in huge quantities so he can sell cheaper, but he saves the people $60 on a $1,000 item. It just plain isn’t fair to the local guy. Then, when the appliance breaks down, he’s the one called to fix it. And then people wonder why repairmen charge so much. The time has come to help level the playing field for the local businessmen, at least when it comes to sales tax.
@Katie-I don’t buy hardly anything on line (I buy local) but I also don’t know anyone who pays the tax either. Most brag about how much they have saved. It doesn’t effect me either way but, where does it end? What else are they going to change to increase revenue? I don’t smoke either, but, I think it is terrible that they are going to try to increase cigarette tax. That is a tax on the poorest people in our country. They are already looking at increasing the tax on alcohol. They want to increase the tax on gasoline and yes, they are even talking about taxing obese people. Where does it end?
“Also, how can a small local appliance dealer compete with some large online dealer who doesn’t charge sales tax? Not only does the big Internet guy buy in huge quantities so he can sell cheaper, but he saves the people $60 on a $1,000 item. It just plain isn’t fair to the local guy. Then, when the appliance breaks down, he’s the one called to fix it. And then people wonder why repairmen charge so much. The time has come to help level the playing field for the local businessmen, at least when it comes to sales tax.”
What a load of malarky. How does the local dealer compete? He has the item there! No wait time. Sure the online dealer ship can get a cheaper price but he still has to pay shipping and collect the cost from the buyer. I’ve bought books online for years. Now why would I pay MORE for those books if I could get them locally? Because I couldn’t get them locally. not even if I special order them. The local businesses have to find there own niche in this economy, much like the Whale Oil and Buggy Whip busineses. And BTW repairmen have always charge “so much”. This isn’t about “leveling the playing field” its about obtaining taxes from a new source (not all states collect out of states sales tax). The big question is from which state will you pay the tax too.
Sellers will remit the tax to the state the purchaser lives in. Every online and catalog seller will have to collect tax for every state and remit to every state, just like Penney’s, Sears, Best Buy, and the big stores do that have a physical presence in every state. And you would be amazed how it will level the playing field for smaller businesses with much smaller items that it has on hand all the time. And it doesn’t make any difference that you can only find things online. They are STILL taxable and you should STILL have been remitting tax to the state on them all this time. The reason they are trying to pass this law is because of all you lawbreakers! Ignorance of the law is no excuse for breaking it.
“And you would be amazed how it will level the playing field for smaller businesses with much smaller items that it has on hand all the time.”
You mean the things that thay have on hand that the people are already buying because they HAVE them? BS.
” And it doesn’t make any difference that you can only find things online.”
Again “small businesses” don’t carry the item wanted, they won;’t order it. So why should I be charged MORE simply because the “small business” is obstinant in becoming obsolete. Not one penny of taxes collected will be spent to help these businesses, not one. So the argument of “leveling the playing field” is moot. Until these businesses can offer something to justify the increased costs they will continue to dwindle.
You only argument is to enforce the taxes that the states aren’t getting a piece of. Just another attempt to get a piece of the pie.
Next will be a tax on the air we breathe.
Gee a bill to raise more taxes. Wonder if it will pass?
And here you go. Another tax increase. They just keep coming and coming.