The National School Boards Association (NSBA) is urging lawmakers to pass the Marketplace Fairness Act, which would require all online or catalog companies collect taxes from internet purchases. The measure would allow states and local governments to collect an estimated $23 billion per year that could be used to address budget shortfalls in education and other priorities.
The U.S. Senate passed its version of the legislation on May 8. The bill is sponsored by Senator Mike Enzi (R-Wyo.), and would require online retailers to collect and remit sales and use taxes to states and local governments, commensurate to brick-and-mortar businesses. Overall, S. 743 seeks to level the playing field between online retailers and local “Main Street” retailers, thereby establishing a level of parity and addressing erosion of local and state tax systems.
The bipartisan bill would allow states and local governments to collect an estimated $23 billion per year that could be used to address budget shortfalls in education and other priorities. S. 743 would exclude small online retailers with annual revenues less than $1 million.
Under the legislation, each state that is a part of the Streamlined Sales and Use Tax Agreement would be authorized to collect remote sales and use taxes. Likewise, states that are not a member under the Agreement could collect remote sales and use taxes, provided they implement simplification requirements such as establishing a single entity responsible for tax administration, return processing and audits and establishing a uniform sales and use tax base among a state and its local taxing jurisdictions.