What is the Marketplace Fairness Act?
It is a bill that will grant states the authority to compel online sellers to collect sales taxes for each transaction, no matter where the purchase is made, just like sales tax is collected in your local store. However, states can only have the authority to collect the sales tax after they have simplified their sales tax laws. Sounds good, huh?
In order to simplify the sales tax laws, states can adopt the Streamlined Sales and Use Tax Agreement (SSUTA), which was developed over the past eleven years. The state must have a full member status with the SSUTA and be in compliance with the same.
Or the state can use an alternative method. They must comply with the following five mandates:
1. Notify retailers in advance of any rate changes within the state
2. Designate a single state organization to handle sales tax registrations, filings, and audits
3. Establish a uniform sales tax base for use throughout the state
4. Use destination sourcing to determine sales tax rates for out-of-state purchases (a purchase made by a consumer in California from a retailer in Ohio is taxed at the California rate, and the sales tax collected is remitted to California to fund projects and services there)
5. Provide free software for managing sales tax compliance, and hold retailers harmless for any errors that result from relying on state-provided systems and data
These were taken from an article What is the Marketplace Fairness Act of 2013?.
How does this affect us as online sellers? For each and every transaction, we must start to collect sales tax if we are in a state that joins in with the SSUTA and the bill is passed. Not only will this raise the cost of doing business for us all, but I believe it will be another way for the IRS to have information about where and what we are selling. Just one more way of invading our privacy.
This is one more method that the giant corporations are trying to force to level the playing field between brick and mortar stores and online sales. We pay enough taxes as small businesses. We don't need more. And YOU as a buyer, don't need higher prices to cover the increases.
Please contact your Senator and tell them NO to this bill!!
You can go to FreedomWorks to send your response or you can find your senator and information to reach them at United State Senate website and contact them this way.
Thank you for your support! I am a proud member of OnlineAuction.com, just one of the many online sites (the best one, by the way) that will be affected by the passing of this bill.
5 comments:
So very glad you got this important issue up on the blog. ;)
"each and every transaction"? Most of what we sell is used, which means the sales tax on those items was paid years ago. That makes this double taxation. I already signed this petition. Thanks for a great post.
Amy thanks for making this simple and understandable. I am with Susan, taxes were paid even on the new without tag items I sell. When I purchased them from the wholesaler for my shoppe, I paid taxes. Should be a darn done deal. We all need to fight this. Thanks again, great blog. CC
Thanks so much, Amy! This is a terrific blog on a timely topic. I already signed this petition, and will promote it some more. I agree. We do not need or want more taxes.
I was shocked at a Swap Meet that I went to that wanted me to pay "sales tax" on my yard sale things that I had sold there (all 9.00 worth at .50 each). I tried to explain that these were all things that I had purchased for my own use (clothes, knick-knacks) but they said it was the law for Snohomish County. That was 12 years ago...I shudder to see how this will affect internet sales. Sound like one big headache.
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