Local Governments and Main Street Retailers see Progress in Senate Action

On Monday afternoon, the Senate approved a procedural motion that will allow the upper chamber to consider and vote on the Marketplace Fairness Act later this week.  This bill would allow state and local governments to enforce their sales and use tax laws on “remote sellers.”  These remote sellers include catalog and online retailers that do not have a physical presence in the state.  Right now, old U.S. Supreme Court case law prohibits state and local governments to enforce their sales and use tax laws because, at the time, the technology was not in place to make such collection and remittance possible without unduly burdening those remote sellers.  However, current technology has made it much easier to implement multijurisdictional tax laws.  States must first simplify their tax laws, and at least 24 already have.  Not only with this allow state and local governments to collect the $23 billion owed to them annually, but it will also level the playing field between remote and local retailers, as local retailers are required to collect and remit sales tax, and lose a lot of business to remote sellers.  As a consumer, I have mixed feelings about this legislation, but as a local government advocate, I see it for what it really is – fairness.