Federal legislation introduced last week requiring online retailers to collect state sales tax is getting mixed reviews from within the industry.
The Marketplace Fairness Act, an amended version of legislation introduced three months ago, this time is taking on a bipartisan flavor, with some Republicans signing onto the bill sponsored by Sen. Dick Durbin, D-Ill.
The bill would allow states with a sales tax to collect the revenue from online retailers, even if the retailer does not have a physical presences in the state. A Supreme Court decision currently bans such collections.
The intent of Durbin’s legislation is to supercede two Supreme Court decisions requiring Internet retailers to collect sales taxes for the individual states only if that retailer has a physical presences in the form of a store, warehouse or shipping facility in that state.
Unlike previous legislation, this newest bill exempts small online vendors with less than $500,000 in gross sales annually from collecting the taxes.
GOP co-sponsors including Sens. Lamar Alexander of Tennessee and Mike Enzi of Wyoming.
Amazon.com, the Internet sales giant which collects sales tax in only five of the 45 states that levy sales tax, said it supports the legislation.
In a statement Paul Misener, Amazon vice president for global public policy, called the new legislation a win-win resolution.
“Amazon strongly supports enactment of the Enzi-Durbin-Alexander bill and will work with Congress, retailers and the states to get this bipartisan legislation passed,” Misener said.
Officials of the Internet auction site eBay are opposed to the Durbin bill and describes the small business threshold as too low.
“This is another Internet sales tax bill that fails to protect small business retailers using the Internet and will unbalance the playing field between the giant retailers and small business competitors,” Tod Cohen, eBay vice president for government relations and deputy general counsel at eBay said in a statement.