COLLECTING SALES TAXES FOR ONLINE PURCHASES
The IAFF supports the Marketplace Fairness Act allowing states and localities to collect sales taxes on online purchases.
Over the past five years, many localities have been forced to make dangerous cuts to local services affecting the public safety – including the fire service. One contributing factor is the loss of sales tax revenue caused by the dramatic increase of online sales. Current law allows e-retailers to bypass the collection of sales tax on items sold on their sites.
The current law has created an unfair playing field between e-retailers and more traditional “brick and mortar” stores. In addition to declining sales tax revenue, the competitive advantage given to e-retailers has also decreased property tax receipts as main street store front businesses have been forced to close their doors. To address this problem, a bipartisan group of members of Congress have introduced legislation – The Marketplace Fairness Act – that would require out-of-state e-retailers to collect sales taxes. In addition to leveling the playing field between on-line and traditional retailers, the legislation would give states the ability to enforce their own sales and use tax laws, relieve consumers of the tedious and complicated act of paying these taxes, and help governors and mayors collect already-owed taxes to prevent future tax hikes or service cuts.
Significantly, the Marketplace Fairness Act does not create any new taxes or increase existing ones. The legislation simply provides a vehicle for states to collect taxes already owed directly from the sellers. Unfortunately, most consumers are unaware of their responsibility to pay sales taxes on their on-line purchases, and therefore ignore the law. In addition to enjoying bipartisan support in Congress, the legislation is backed by a large coalition of organizations. Over 200 business, labor and state and local government organizations including: the National Governors’ Association, National Conference of State Legislatures, National Association of Counties, U.S. Conference of Mayors, National League of Cities, Retail Industry Leaders Association, National Retail Federation as well as Fortune 500 companies including Amazon, Best Buy, Wal-Mart and Safeway.
H.R. 684, the Marketplace Fairness Act of 2013
S. 743, the Marketplace Fairness Act of 2013
Summary: The Marketplace Fairness Act would give states voluntary options
that would allow them to collect the state sales and use taxes that
On April 8, 2013, H.R. 684 was introduced in the U.S. House of Representatives and referred to the Judiciary Committee.
On April 16, 2013, S. 743 was introduced in the U.S. Senate and referred to the Finance Committee.
On May 6, 2013, S. 743 passed the Senate by a vote of 69 -27.