The U.S. Senate has passed a bill sponsored by Sen. Dick Durbin called the Marketplace Fairness Act. The legislation is good for business and good for taxpayers.
The bill does not establish new taxes, it gives states the authority to collect the sales tax they are already due. Customers must report such taxes on their state income tax return, but fewer than 5 percent of taxpayers in Illinois did so last year.
Currently, online retailers are not required to collect sales tax on Internet transactions, giving them an advantage over brick-and-mortar small businesses. The bill levels that playing field and also gives cash-strapped state and local governments a boost in revenue.
You might think that every online retailer would oppose this bill, but that's not the case. Amazon.com supports Marketplace Fairness. So do major Internet sellers like Barnes & Noble, Best Buy, Target and Walmart. So do the National Retail Federation and the Retail Industry Leaders Association.
Critics have argued that the bill would pose an undue burden on Internet retailers by forcing them to collect local income taxes. I beg to differ. These companies employ some of the best tech minds around. They could easily use a program -- which states would be required to provide -- to calculate sales tax.
Years ago, people argued that online sales ought to be exempt from tax collection because the Internet was still a baby in its crib. Fine, but that baby is all grown up now. Online sales have grown by leaps and bounds, as have the companies who offer them. Charging sales taxes may pose some difficulty, but the challenge is far from insurmountable and help will be provided from states. This bill is a good idea, a fact demonstrated by the large amount of support this bill.
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