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THE WHITE HOUSE has backed a Senate bill to force online retailers like Amazon and eBay to collect state and local sales taxes, hoping to end a cost disadvantage hampering bricks and mortar businesses.
The bill, which was being debated in the Senate yesterday, could lead to the recouping of $11 billion in lost annual sales taxes, according to a University of Tennessee research study.
“We believe that the Marketplace Fairness Act will level the playing field for local small-business retailers, who are undercut every day by out-of-state online companies,” said White House spokesman Jay Carney.
“Today, while local small-business retailers follow the law and collect sales taxes from customers who make purchases in their stores, many big-business online and catalog retailers do not collect the same taxes.”
“We have heard overwhelmingly from governors, mayors and the business community on the need for federal legislation to level the playing field for our businesses and address sales tax fairness.”
The Retail Industry Leaders Association says the bill would end unfair treatment for many small businesses
“The current policy, which forces competitors to play by different rules, is inherently unfair and puts Main Street retailers at a disadvantage to out of state, online only competitors,” said Bill Hughes, the association’s senior vice president for government affairs.
The Act would require Internet and remote retailers to collect state sales taxes no matter where they are located when a transaction takes place, and advocates hope it would ease budget problems in many cash-strapped states.
Opponents of the Act say it would still be unfair because retailers in a state which has no sales tax would still be liable to collect tax on purchases made in distant states which do have sales taxes.
They say the measure would also harm smaller online retailers as big firms like Amazon and WalMart can more easily absorb the impact of the new sales tax.
- © AFP 2013.
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Of course in the states when you pay sales tax it’s in the region of 6% but here our vat is as high as 23% ,a disgracefully high level of taxes which is used to “run the country” generally as inefficiently as bloody possible.
I can see both sides of the argument.I like the tax free aspect of things but if it keeps going the way it is your local niche stores will disappear forever and that will hurt deeply in the end.At some point Commuinity must overcome dominance, profit and the bottom line
I’m all for supporting local businesses but some don’t even try! I’ve seen a lot of small shops in my local town close down in the last few years and most because they were shops that only survived due to the boom because people wanted things NOW! and didn’t mind paying 20-30% more for that instant gratification. Now people are a bit more careful with their money and are prepared to wait a few days for things to come in the post. Also, local shops need to seriously change their attitude and realise that they no longer have a captive customer base but one that will happily shop from all over the world to get the best products and deals. One particular shop I can think of limped on and on, removing lightbulbs to save electricity when the real problem was that their stock was outdated. They kept selling the same old overpriced stuff they always had. If people didn’t want it when it was new, why would they want it when it was outdated? I used to buy a lot on Amazon.com rather than the co.uk site because they had a wider range, were cheaper, and the items arived generally as quickly as from the european site. That may now change if they start adding on extra charges. Although I still think a 16G memory stick from Amazon will be 1/4 the price my local store would charge. And before I get red thumbs from every small shopkeeper in Ireland, I’ll just say that there is another store right beside the one I mentioned that does a booming trade, so much so that they have had to expand. This is because they are putting in the effort, embracing the internet and social media and constantly clear out dead stock. But mostly, because they stock things people want and would rather buy in person having examined it rather than from a picture online.
No red thumbs, good points!
No more cheap stuff from the US then
America is broke the administration will think and come with anything to generate more revenue . Looking for suckers to pull the cart along while the elite sit in the cart and eat cream cakes !!!
This won’t generate more revenue for the federal government. The issue is about state sales taxes. Its equivalent to saying: if a German company sells stuff to Ireland, it has to collect VAT on Irish sales and send it to the Irish government, which is broadly what happens.
America is broke but they still spend Trillions fighting wars around the world. Time to get their priorities right first.
Actually, a German company doing online sales to Ireland would pay tax to the German state due to the European Single Trade Zone
No, it depends on the amount of trade the seller does in that country. E.g. Amazon charges VAT at the Irish rate and it goes to the Irish govt. A smaller retailer will pay in its own state, as you say. Looks like if this bill goes through, thresholds will be up to the individual states.
Nice way to scare off all the biggest online businesses who are more than likely helping your economy and giving people all over the country work!
Not really when it applies to every business.
Have you seen the conditions in the gigantic Amazon warehouses in the States?! Shocking shocking exploitation of low income workers.
Mother F*******. I live in the US and only use Amazon, E-Bay, etc. because there isn’t a tax charge.
Move to Delaware or New Hampshire?
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