A bipartisan group of lawmakers has reintroduced the Marketplace Fairness Act in another effort to bring more consistency to the imposition of state sales and use taxes on online purchases.

The act would give states the right to require out-of-state businesses selling online or via catalogs to collect state sales taxes on purchases sold into their states. The bill provides states the authority to enforce existing sales and use tax laws, if they choose to do so, by adopting either one of two options. The Streamlined Sales and Use Tax Agreement (SSUTA) allows any state that is a member of SSUTA to require remote sellers to collect state and local sales and use taxes; or with Alternative Minimum Simplification Requirements, states that are not SSUTA members could require remote retailers to collect state and local sales and use taxes if they adopt the minimum simplification requirements outlined in the bill. There is also a “small seller exception” prohibiting states from requiring remote sellers with less than $1 million in annual nationwide remote sales to collect sales and use taxes. According to figures from the Small Business Administration, 99 percent of online sellers would fit into this "small" category and only a few would be required to collect and remit sales taxes with a $1million small seller exemption.

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access