The 2013 version of the Marketplace Fairness Act will enable brick-and-mortar retailers to better compete with online sellers that don't charge sales tax, supporters say.
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View full sizeA worker unloads boxes of merchandise at Amazon.com's Phoenix Fulfillment Center in Goodyear, Ariz., in 2010. Amazon, which collects state and local sales tax in seven states, is among those seeking a federal law that would require all online sellers to charge state and local sales tax.CLEVELAND, Ohio -- The era of not paying sales taxes on Internet purchases could be over soon.
On Thursday, a bipartisan bill allowing states to collect unpaid online sales taxes is expected to be introduced in both the House and Senate.
The Marketplace Fairness Act of 2013 will enable brick-and-mortar retailers to better compete with online sellers that don't charge sales tax, rather than leaving it up to consumers to keep track of and pay their own sales tax.
The gap between what consumers paid in-store and online amounted to more than $23.3 billion - including an estimated $628.6 million that could have gone to the State of Ohio and local governments, according to the National Conference of State Legislatures.
Similar bills were introduced in 2011, but died before being approved.
This time, supporters say the compromise "e-fairness" bill resolves the differences between the two previous proposals, increasing the chances it will pass.
Both earlier bills sought exemptions for smaller online businesses, but differed on how they defined that threshold.
The Senate version set the limit at retailers making less than $500,000 in annual sales, while the House version set it at $1 million annually, or $100,000 in a single state.
The reason Internet retailers like Amazon.com don't charge sales tax in every state stems from a 1992 Supreme Court ruling that out-of-state sellers don't have to collect local taxes in states where they don't have a physical presence.
Amazon, which currently charges sales tax in seven states, has said that it wants the sales tax issue resolved at the federal level rather than having different policies in different states.
In addition to the support from Congress members, a Marketplace Fairness Coalition representing nearly 3 million retailers, companies and business groups nationwide will promote efforts to get the legislation approved during this session of Congress.
Coalition members include the Ohio Council of Retail Merchants and the Ohio Association of College Stores, as well as Ohio-based DDR Corp., Jo-Ann Stores, Limited Brands, The Kroger Co., and Wendy's International Inc.
"They believe that the time has come to formally join together to level the playing field for all sellers and support a marketplace that is vibrant, viable and equitable for everyone," the coalition said in a written statement.
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