Marketplace Equity Act (HR 3179) introduced in House of Representatives

HR 3179 introduced in House of Representatives

Today Rep. Steve Womack (R-AR) and Rep. Jackie Speier (D-CA) introduced before Congress the Marketplace Equity Act (HR 3179), a bill that, like the Main Street Fairness Act, authorizes state to require all online retailers, regardless of location, to collect state sales tax.

The introduction of the Marketplace Equity Act is a sign that more and more legislators are becoming aware of the problems inherent in the fact that while bricks-and-mortar retailers have to collect sales tax, online retailers do not. We’re happy to see that Washington DC legislators are listening to state and local legislators—not to mention their constituents—and are working hard to offer possible solutions.

Although the Marketplace Equity Act differs in some details from the Main Street Fairness Act, the two bills have the same goal: to ensure that states can enforce existing sales tax laws in cyberspace by requiring online retailers to collect sales tax. The very fact that two bills with this goal exist emphatically demonstrates how much they are needed.

Communities need sales tax revenue to pay for schools, police, and libraries, and local businesses are at a disadvantage when they try to compete with online retailers that don’t have to collect sales tax. By allowing states to require online retailers to collect sales tax, the Marketplace Equity Act and the Main Street Fairness Act stand to return to states over $23 billion in uncollected sales tax. They will also create a level playing field for local retailers, which create three times as many jobs as online retailers.

We welcome Reps. Womack and Speier and their cosponsors to the fight to ensure that all retailers play by the same rules, and we look forward to working with them.

12 Responses to Marketplace Equity Act (HR 3179) introduced in House of Representatives

  1. [...] a round-up of the press coverage on the Marketplace Equity Act, introduced [...]

  2. Anonymous says:

    SALES TAX BILL H.R.3179.IH 112th Congress (2011-2012)
    HR 3179 Is a sales tax and more regulation for small business bill.
    House bill HR 3179 is a sales tax bill it is called bipartisan marketplace equity act. If this bill is passed everyone that places an on line order will pay sales tax. We don’t need more taxes and regulation we needs jobs. All house bill HR 3179 is, is a way to separate you from your hard earned money. Contact your Congress man or woman and appose this bill NOW!

    • FedTax says:

      Technically, unless you live in a state without sales tax, you are already supposed to be paying sales tax (or typically equivalent use tax). Once again – this is not a new tax, just a more responsible method of ensuring the tax due is collected.

  3. Anonymous says:

    This bill is hogwash. It is a bad idea to screw with the internet period. States collect plenty of money from instate sales that they don’t do anything for. When are going to be taxed for the amount of air we breathe? Just how stupid do they think American citzens are? They need to go after crooked banks for the mortgage mess.

    • FedTax says:

      Technically, unless you live in a state without sales tax, you are already supposed to be paying sales tax (or typically equivalent use tax). Once again – this is not a new tax, just a more responsible method of ensuring the tax due is collected.

  4. Ken Miller says:

    This is a new tax…….don’t kid yourself. If all the businesses that are affected by this new tax have to live within their means, so do the greedy states. Many businesses that ship have to pay for shipping or pass that cost on to their clients so that goes a long way in “leveling the playing field”.

    • FedTax says:

      If only those shipping fees actually went toward educating kids, paving, roads, or supporting any of the other local priorities the customers of those businesses voted for.

      Fact: Sales tax is already due, but most retailers simply elect not to collect it because in 1967 (yes, 45 years ago) the Supreme Court ruled it would be too burdensome for remote retailers to manage.

      Fact: Today, managing sales tax need not be as hard as some (eBay) would lead you to believe – and our TaxCloud service is completely free for retailers of any size.

      • Anonymous says:

        Gosh, 45 years ago!!! Guess what, times may have changed, but not so much that what ocurred 239 years ago in Boston is still not appropriate! The enemy is the same, they just masquerade in different clothes.

      • FedTax says:

        Are you referring to the Boston Tea Party where our revolution began based upon taxation without representation? Exactly how is that relevant?

        This issue is about sales tax collection. Sales tax is intensely local, based upon how you and your community vote. That is taxation with representation in its most classical form. Your community is directly involved in the votes over your local priorities and your elected representatives. At each election, you and your community consent to how you will be taxed, in what amount, and for what purpose. If you want to modify or repeal your state’s sales and use tax laws, or any of your state’s laws for that matter, you can – that is the whole point of our representational form of government.

        The bills pending before Congress are not about a new tax at all – just a more efficient way of allowing your state to collect (or elect not to collect) the tax you voted for in your community (because it seems about 99.6% of consumers do not self-report and remit Use taxes due on their online purchases).

  5. Jeff Wallace says:

    The only way they can pass trash bills like this is to impose it upon the people. Put it to a popular vote and this thing would fail miserably in EVERY single state. (One would hope. Depends on the state of indoctrination, and the level to which the “useful idiots” have been infused with the type of drivel contained in this article.)
    “If you want to modify or repeal your state’s sales and use tax laws, or any of your state’s laws for that matter, you can – that is the whole point of our representational form of government.” LOL!! Yeah right! As long as the wolves are in charge and patrolling the sheep pen that will never happen.
    I can think of 16 trillion reasons NOT to give bureaucrats any more money. Get your hands out of the pockets of the people and use what you have.
    The already oppressive restrictions on “brick and mortar” “mom and pop” stores are the reason local businesses are at a disadvantage, and why so many people turn to the internet to buy and sell. What the obtuse politicians refuse to see is when costly obstructions (government mandated regulations to run a business are quite lengthy) are removed, sales will soar and when taxes are lowered, revenues increase. This is the ONLY thing that will create jobs. The dubious idea of government creating the monster of taking money from the public to “stimulate” economy, has never worked, will never work, and has ALWAYS come back to bite the hand of the populous who were forced to feed it. The sad thing is that this govt. thinks it is “entitled” to our money. “Return to the states..uncollected sales taxes” is an indication of the problem. It’s not the states money. The only “returning” that needs to be done is the politicians “returning” to responsible fiscal practice, and “returning” economic power into the hands of the people to spend their OWN money as they please.
    “Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.” – Ronald Reagan
    Some taxes are necessary for infrastructure, I agree. But so is responsible spending. Enough is Enough!
    If the government cannot make it on what they already requisition from the people, let them do what they have already forced many “brick and mortar” “mom and pop” stores to do. Shut down!

  6. OnlineArtist says:

    Of course the playing field needs to be leveled. Shipping costs should NOT be part of the idea of levelling – you pay shipping costs as a CONVENIENCE. It gets delivered to your DOOR. Look at the shipping costs as something you pit against the gas in your car that it would take to get to the store instead of versus sales tax. That is much more equanimitable. If online only folks are on a level playing field with brick & mortar folks, then that’s fair – but the only way that a bill like this would possibly work is to pay sales tax to the state that the item was SHIPPED FROM. Not where it’s going.

    • FedTax says:

      Thanks for your comment, but we disagree with your conclusion: that sales tax should be based upon where a purchase is shipped from, rather than where it is going. This concept is referred to as origin-based taxation, and here is why it is bad:

      If you live in Vermont and make a purchase from an online store based in California, you’d pay California sales tax that is remitted to California. Where, as a Vermont resident, you have no say in the sales tax rate, cannot vote for state and local representatives, and do not benefit from the services that sales tax helps fund.

      In other words, it’s taxation without representation. It’s also, for our money, simply wrong—when you pay sales tax, you should benefit from the roads, schools, parks, and more that it funds.

      The proposed legislation is destination-based taxation, and here is why it is good:

      If you live in Vermont and make a purchase from an online store located in California, you would pay Vermont sales tax. The store in California would collect the sales tax just as a local Vermont store would and remit it back to Vermont, where it would help to pay for police and fire departments, public roads, schools, libraries, and more. And as a resident of Vermont (or any state with sales tax), you have the opportunity to vote on the local sales tax rate and elect the state and local representatives who help administrate sales tax.

      In other words, destination-based sales tax is taxation with representation.

      I hope our response helps your understanding of this important issue, and thank you again for taking the time to comment.

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