Why Small Business Are Rejoicing Over the Marketplace Fairness Act
The U.S. Senate recently passed the Marketplace Fairness Act. To break it down, the Act gives states the right to collect sales tax from “remote sellers,” including online and catalog retailers, regardless of where they are located. However, there is one catch. States must untangle their sales tax laws in order to make the multi-state sales tax collection process easier. This bill is partly a result of the progression of technology as it is no longer difficult to keep track of thousands of differing local tax rates.
So what does this mean to you?
This bill may bring the end of sales tax-free online sales, which has many small to mid-sized retailers very excited as it helps level the playing field with large online retailers such as Ebay.
The National Retail Federation (NRF) believes the Marketplace Fairness Act will level the competitive playing field for all retail businesses.
“We applaud Senators Enzi, Durbin, Alexander and Heitkamp and the entire U.S. Senate for standing with local retailers and America’s small business owners in a strong, bi-partisan vote for final passage of the Marketplace Fairness Act, despite a highly-funded misinformation campaign by the legislation’s opposition,” said NRF President and CEO Matthew Shay. “Today’s action in the Senate is a significant step for sales tax fairness and we look forward to a robust debate in the U.S. House of Representatives.”
“The retail industry – the largest private sector employer – is rapidly changing and evolving,” said NRF Chairman of the Board Stephen I. Sadove. “Retailers compete for customers on many different levels, distribution channels and fronts, including service and selection, but they cannot compete on sales tax. Congress needs to address this sales tax disparity and allow retailers to compete freely and fairly.
In response to the bill passing the Retail Industry Leaders Association (RILA) issued the following statement:
“The Senate’s overwhelmingly bipartisan passage of this legislation foreshadows the end of the special treatment of big online businesses at the expense of retailers on Main Street,” said Bill Hughes, senior vice president for government affairs. “After such a resounding vote in the Senate, we look forward to a constructive debate in the House to level the playing field for all retailers this year.”
“For too long the Main Street retailers that are an integral part of their communities have faced tax rules that put them at a disadvantage to their out of state, online-only competitors. The Senate has voted to ensure that the market, not government, determines winners and losers,” said Hughes. “We are confident the House will reach the same conclusion.”