Senate Majority Whip Richard Durbin, D-Ill., is expected to introduce the Main Street Fairness Act today. The bill would enable states to require out-of-state sellers to collect sales tax whether they have a physical presence in the state or not.
The act supports a system set up in the 1990s to enable remote sellers to collect and forward tax revenues to states. The legislation would simplify a process that was so complicated the U.S. Supreme Court ruled in 1992 in Quill vs. North Dakota that retailers are required to collect sales tax from out-of-state customers only if retailers have a physical presence such as a store, warehouse, or office in the customer’s state.
The Main Street Fairness Act allows states that have adopted the Streamlined Sales and Use Tax Agreement – which was developed to simplify sales tax laws in response to the Supreme Court ruling – to require out-of-state sellers to collect sales tax whether they have a physical presence or not. The bill would cover all “remote sellers,” which include online retailers, catalog merchants and “1-800” offers on radio and television.
CBA Executive Director Curtis Riskey said, “The fairness act will level the playing field for brick-and-mortar retailers who suffer as much as a 10% price disadvantage in some states because of unfair sales-tax laws.” He said local businesses contribute to local economies with jobs and tax revenues that pay for police, fire, parks, and other local services that Internet-only retailers avoid.
The National Retail Federation’s Senior Vice President for Government Relations David French said the act is a congressional fix to a constitutional problem.
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