Marketplace and Internet Tax Freedom Act will Empower States

Jul 16, 2014 2:51 PM  By

Read the Senate bill here.

Read the Senate bill here.

After years of bills appearing before Senate and Congress, could sales tax enforcement on goods and services bought in the Internet finally be reality? Yes and no, depending on how you look at the Marketplace and Internet Tax Freedom Act, which was introduced in the U.S. Senate on July 15.

The bipartisan bill was introduced by Senators Mike Enzi (R-WY), Dick Durbin (D-IL), Lamar Alexander (R-TN), Heidi Heitkamp (D-ND), Susan Collins (R-ME) and Mark Pryor (D-AR), and combines two critical legislative issues – the Marketplace Fairness Act and the Internet Tax Freedom Act.

The bill would keep access to the Internet tax free by limiting the ability of state and local governments to impose Internet access taxes for 10 years, while giving states the ability to enforce their sales tax laws on businesses selling to consumers located within their borders.

If passed, the bill would give the states the right to pursue the collection of sales taxes on goods and services purchased via the Internet.

However, that would mean an online sales tax could be collected in up to 44 states. That’s because Alaska, Delaware, Hawaii, Montana, New Hampshire and Oregon do not have a sales tax.

The National Retail Federation, the Retail Industry Leaders Association and the International Council of Shopping Centers – which each represent bricks-and-mortar stores – issued press releases on July 16 to praise Senate leaders for drafting the bill.

“The retail industry has rapidly evolved over the last two decades with ecommerce and mobile commerce, and it is time for Congress to eliminate the sales tax disparity, which disproportionally impacts community and independent retailers,” NRF Senior Vice President for Government Relations David French said in a press release.

“Given the overwhelming bipartisan vote on the Marketplace Fairness Act in the Senate and near-universal support in the House for ITFA, it seems obvious that these issues can and should be resolved together this year,” said Bill Hughes, RILA’s Executive Vice President for Government Affairs.

  • Keith Yockey

    It’s not 44 States, but over 600. The Bill defines a State as the Several States, DC, all US Territories, and all (565) Sovereign Indian Nations.

    Let ITFA pass as a clean Bill. MFA passed last year. Why the do-over?

    • Change You Can Keep

      It’s actually over 9,000 tax jurisdictions, state & local that small retailers would be required to enforce. This is a huge benefit to large retailers like WalMart and Amazon

  • Larry B

    They need to make sure there is a central system for internet sellers to report and pay taxes to one entity similar to the IFTA (International Fuel Tax Agreement) for trucking before they go and let every state impose their own way of collection and enforcement. It was a nightmare reporting and paying fuel tax before the IFTA was adopted by all states.