U.S. Sen. Mike Enzi is one of ten senators introducing a bipartisan bill that would allow states to collect already-owed taxes from out-of-state retailers. The bill would target online and catalog retailers.
A loophole in current tax law, according to a media release from Enzi's office, allows out-of-state sellers to avoid these taxes while, in particular, small town retailers are always required to collect the same sales taxes.
The "Marketplace Fairness Act" would give states the option of collecting sales and use tax revenues from out-of-state retailers through a simplified system. The bill would streamline the 7,500 sales tax jurisdictions, according to the release, and offer just two options for collecting sales tax from online and catalog purchases.
Enzi says that the bill is more than just a tax bill.
States could become members of the Streamlined Sales and Use Tax Agreement and would be able to require tax collections from sellers within 90 days. Those states that didn't become SSUTA members would still be able to collect taxes if they “adopt certain minimum simplification requirements” and still give notices of collection requirements to sellers, the release said.
In an AP report Wednesday, Amazon.com Inc was reported as in agreement with the bill, saying they would prefer a federal taxation solution to current state efforts in taxing which they have struggled with.
Ebay disagreed, saying that small retailers would be unfairly burdened by the tax, the report said.
The legislation would exempt sellers who make less than $500,000 in total remote sales in the year before the sale.
U.S. Senators Dick Durbin (D-Illinois) and Lamar Alexander (R-Tennessee) introduced the bill with Enzi on Wednesday.