Did you hear the latest in Internet sales tax news? The Marketplace Fairness Act of 2015 was unveiled earlier this month, and it seems to have support from both sides of the aisle. (Ah, yes, but haven’t we heard that before?) The new Act is substantially similar to the 2013 version, but the 2015 version, prohibits states from imposing collection requirements on remote sellers prior to one year after Marketplace Fairness is enacted (versus 180 days), or during the busy holiday retail season between October and December of the first calendar year that Marketplace Fairness Act is enacted.
The legislation would give states the option to require out-of-state businesses to collect and use taxes the same way local businesses do. This would especially impact online sellers and consumers in the form of paying online sales tax.
What do those against it think? As Forbes reports, “Opponents say it would obliterate the physical presence standard, something they assert is a baseline protection shielding taxpayers from harassment by out-of-state collectors. It seems hard to support that claim, although there’s no question the law would help harmonize brick-and-mortar and online sales.”
Another article claims that Congress is “clueless” about the impact this bill would have on small mom-and-pop type Internet companies.
Opponents also claim:
- The Internet sales tax legislation would require remote sellers to question consumers about where they live, look up thousands of taxing jurisdictions, and collect and remit taxes for out-of-state entities.
- The online sales tax law would harm interstate commerce by burdening online sellers, “With 9,600 taxing jurisdictions, each with its own unique definitions, holidays, and rates.”
- This new legislation massively expands the authority of states’ tax collection.
What do we think? At Miles Consulting, we haven’t suddenly become fans of the new legislation, because we really didn’t like the old legislation either. The $1,000,000 retail threshold is still too low, and we’d still like some more thought given to things such as resales, audits, etc.
We’ll keep reporting as the Internet sales tax debate continues. In the meantime, be sure to contact us if you have any questions about state and local tax issues, sales/use tax planning and more!
Miles Consulting Group, Inc. is a professional service firm in San Jose, California specializing in multi-state tax solutions. Our firm addresses state and local tax issues for our clients, including general state tax consulting, nexus reviews, tax credit and tax incentive maximization, income tax and sales/use tax planning and other special projects, including the new California Competes Tax Credit and the California Manufacturer’s Partial Sales Tax Exemption. To learn more, contact us today at www.MilesConsultingGroup.com.
