Yesterday’s Editorial in the LA times made a strong case for the provisions of the Main Street Fairness Act, notably that this is not a new tax (as opponents are spinning it). Rather that tax laws have not kept up with the changing sales environment. The editorial correctly notes that the Supreme Court rulings often referenced as opposing collection of sales tax by remote sellers (Quill, Bellas Hess) actually pre-date the Web itself. It also notes that arguments which fall back on the existence of ‘use taxes’ — the longstanding requirement that individuals report and remit the equivalent of sales tax on their own – are not productive and that the problem could be better solved at the retailer level.
The impact to states of a change in law is significant. According to a study cited by the National Conference of State Legislatures, by failing to collect that tax California alone will lose over $3.3 billion in 2010. A link to that study is below. The efforts of the Streamlined sales tax project combined with passage of the Main Street Fairness Act will give states the opportunity to collect these taxes and distribute them to local communities, as determined by local law. TaxCloud proves that technology is indeed up to the task – and it is available at no cost to the merchants themselves.