The Marketplace Fairness Act, which passed the Senate in 2013 before being rejected in the House, has recently been introduced by a bipartisan group of lawmakers that includes Senator Heidi Heitkamp, D-N.D, inforum.com reports. Senator John Hoeven, R-N.D., also supports the legislation, as did both of Minnesota’s senators when it came up in 2013.
The bill has the backing of Amazon and other ecommerce businesses like Target, as well as groups like the International Council of Shopping Centers. Kenny Holweger, owner of Kenny’s Music Shoppe, said online retailers have a tax advantage over businesses like his. The taxes can start to add up when customers are buying USD 3,000 instruments, the source cites. Heitkamp said the bill also helps states and municipalities collect tax revenue that they are owed to help pay for basic services at a time when more purchases are being made online. The portion of retail sales made on the internet have grown since 2005, from about 2.4% of total sales in 2005 to almost 7% at the end of 2014, according to the US Census Bureau.
On the other hand, Matthew Glans, a senior policy analyst for the Heartland Institute, wrote in a 2013 letter to the Herald that the proposed tax on online would negatively impact the online economy, hurdle tax competition among the states, raise less revenue than legislators expect and open up taxpayers to more taxes. Proponents, however, have argued that the bill is not a new tax itself. Consumers already owe sales and use taxes on internet purchases, but compliance is “very low,” according to a press release from Heitkamp’s office, cited by the source.
Myles Vosberg, director of the tax administration division at the North Dakota Tax Commissioner’s Office, said there is not a good way to enforce the sales tax requirements on online and other remote consumers. Amazon collects sales tax on purchases from North Dakota and remits them back to the state because of its physical presence in the US. North Dakota lost more than USD 5.5 million from the lack of sales tax revenue from remote sellers between 2011 and 2013, according to the press release, cited by the source. The proposed bill would require remote retailers to collect sales taxes and remit them to the state where the purchase was made.
North Dakota is one of 24 states that’s part of the Streamlined Sales and Use Tax Agreement, which the state could use to enforce existing sales and use tax laws under the bill.
Every day we send out a free e-mail with the most important headlines of the last 24 hours.
Subscribe now