On Tuesday in the Times-News and Magicvalley.com, read Joe Cadotte's story with what local businesses are saying about the Marketplace Fairness Act.
Will applying state sales tax to Internet purchases level the playing field or drive American web sales overseas? A U.S. Senate vote Monday will make Washington's stance loud and clear if such a bill is passed on to the House.
There have been so many attempts by politicians to require sales tax on Internet purchases that the new bill is titled: “The Marketplace Fairness Act of 2013.”
I chatted with local business leaders, economists and politicians and scoured some 13 articles about the government proposal. Individuals on both sides agree on one thing: The bill will most likely pass the Senate on Monday (but might have difficulty passing the House because of the Tea Party).
Short answer: Money and Amazon.
With around $30 billion per year in revenue estimated to be lost each year from tax-less web transactions, and pressure on state governments to come up with money, many Democrats and some Republicans see it as an easy way to collect dough (which is expected to be much more than $30 billion if the bill is passed into law).
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Amazon has been on the sideline (and probably behind the scenes) objecting to taxing Internet sales every time it’s been mentioned in Washington except now. The web retail giant has reportedly found a way to make even more money than it already does by locating its warehouses around the nation to ultimately provide one-day delivery -- rather than its previous strategy of selling almost everything from one location to avoid taxes. Now the company believes it can make much more money localizing its warehouses than riding the Wild West nature of the web.
Since Amazon has come out in support of the Marketplace Fairness Act, the wigglers in Congress have followed the lead.
One stark detail in the bill is an exemption for companies who sell less than $1 million worth of stuff per year through the Internet.
This is what draws the line for local businesses in the Magic Valley. Businesses with customers who might have to pay sales taxes on Internet purchases say the bill will be detrimental.
Likewise, Magic Valley shops that don’t make more than $1 million per year from web revenue say taxing web sales will be good for the economy.
Based on national arguments, proponents say the bill will level the playing field and help small business compete with the Internet. Opponents say it will just drive huge corporations to sell things overseas where U.S. law doesn’t have jurisdiction.
Despite the vote on Monday, 22 states have already put rules in place similar to the one proposed on Capitol Hill. Although many have tried, Idaho is not one of them.