Pureplays targeted with US tax
The US Senate has voted in favour of an online sales tax, in a move that could have major implications for the revenue of pureplays across the country.
The Senate on Friday voted 75-24 in favour of an amendment to support the Marketplace Fairness Act, paving the way for it to be passed later in the year by legislators.
The Act would allow the nation’s states to collect a sales tax from retailers whether they have physical stores or not, with retailers taking in less than $1 million exempt.
Under current federal law, states can only collect tax from retailers if they have a physical bricks and mortar presence.
Online retailers are already obliged to collect sales tax from customers who live in the state they operate in, however, the Act will oblige them to collect tax from all customers nationwide.
The tax has predictably divided retailers, with most physical retail chains and pureplay, Amazon, arguing the Act is needed to even out a currently unfair playing field.
Other pureplayers, like eBay, and e-commerce lobby group, NetChoice, are against the tax and argue that it will stymy the Internet e-commerce boom.
EBay’s senior director of global public policy, Brian Bieron, says the tax will open pureplays up to a variety of cross conflicting tax laws across 10,000 jurisdictions.
“[It will threaten] them with audits and litigation by tax collectors from states that are thousands of miles away from where they live, work, and create jobs,” he has said in the American media.
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