White House Endorses Internet Sales Tax
3:26 PM, APR 22, 2013
• BY DANIEL HALPER
The White House today endorsed the Marketplace Fairness
Act, which would be a tax hike for purchases made over the Internet. The White
House claims the tax would "level playing field for local retailers."
"The Administration strongly supports S. 743, which
will level the playing field for local small business retailers that are in
competition every day with large out-of-state online companies," reads the
Obama administration's statement on the policy.
Although States presently have the authority to tax the
sale of goods or services sold from out-of-state vendors, they are prevented
under current law from requiring the collection of such duly-enacted
taxes. As a consequence, while local
small business retailers follow the law and collect sales taxes from customers
who make purchases in their stores, many big business online and catalog
retailers do not collect the same taxes.
Because these out-of-state companies are able to play by a different set
of rules, this disparity undermines the ability of cities and States to invest
in K-12 education, police and fire protection, access to affordable health
care, and funding for roads and bridges.
This bill would eliminate the unfair advantage currently enjoyed by big
out-of-state online companies over local neighborhood-based small businesses.
In recent years, collection technologies have improved
and States have made significant strides to cut red tape and simplify their tax
systems. At the same time,
Internet-facilitated sales continue to grow as a share of total transactions,
contributing to ongoing State budget pressures.
In recognition of these developments, a broad and growing group of
bipartisan State and Federal leaders — including governors, mayors, business
and labor groups, and members of Congress from both parties — has called for
commonsense Federal legislation to make the system more fair.
The Administration strongly supports provisions in S. 743
that would directly address those concerns by granting only those States and
localities that have simplified their sales tax systems the option to require
all retailers, including those located out-of-state, to collect sales and use
taxes already owed under law. The
Administration also is pleased that S. 743 provides an exception for small
online businesses and requires States to make available, at no cost to
retailers, software that helps calculate the State sales tax on remote
transactions, as well as administrative services.
The Administration looks forward to working with the
Congress on this bipartisan legislation to support State and local priorities
and promote a level playing field for local retailers.
The legislation is being considered in the Senate:
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