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senate Bill S. 698

Should Online Retailers Have to Pay Sales Taxes on Out-of-State Transactions?

Argument in favor

This bill levels the playing field between physical stores and online retailers —operating online doesn't mean a company shouldn't pay sales taxes.

Terry's Opinion
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06/24/2015
Brick and mortar stores shouldn't carry the burden alone.
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John's Opinion
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07/31/2015
You pay sales tax when you go to the store and buy not collecting sales tax from online purchases you're hurting your own local economy
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Scott's Opinion
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06/20/2016
This has been a huge loophole, and it's basically just stealing.
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Argument opposed

An online sales tax disproportionately impacts small businesses. Plus, the taxes will be passed on to consumers in the form of higher prices.

heychrisfox's Opinion
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07/19/2015
As a small business owner primarily on the net, this would directly drive traffic away from me. Every dollar counts, and pushing people away so Walmart has to struggle less is pretty infuriating.
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Sid's Opinion
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04/02/2016
Many of these businesses operate on small profit margins. Since the government was slow to act in the beginning, implementing a tax now would be unfair because these businesses are already operating with a certain budget which dissent account for a tax.
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John's Opinion
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06/21/2015
We DO NOT need any new taxes!! You are bringing in more revenue than any country in history. Any company can increase their brick and mortar presence with Internet sales. STOP TAXING US!!!
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What is Senate Bill S. 698?

This bill would authorize states to collect sales taxes from out-of-state retailers who sell and ship products to consumers within their borders and prevent consumers from being taxed for internet access. It would effectively end an online retailers' ability to avoid paying sales taxes on transactions that happen in states where they do not have a physical presence, like a store or office.

Remote sales would be defined as a sale of goods or services into a state where the seller wouldn’t be legally required to pay, collect, or remit state or local sales and use taxes.

Small-sellers — defined as businesses who generate less than $1 million in annual revenue from remote sales — wouldn’t be required to collect sales taxes on their remote sales.

Impact

People who shop online, businesses that sell products on the internet between states, and state tax agencies.

Cost of Senate Bill S. 698

A CBO cost estimate is unavailable.

More Information

In-Depth: The National Retail Federation, which strongly supports this legislation, notes that state governments miss out on around $25 billion in sales taxes every year because businesses don’t have to pay sales taxes on transactions occurring in states where they don’t have a physical presence. This is the result of a 1992 Supreme Court Case — Quill Corp. v. North Dakota — which created the physical presence rule for sales tax collection.

In a nutshell:

"Most of those who sell via brick-and-mortar stores are lobbying hard for the bill, which they say would level the playing field for all retailers. Those who sell their goods online, on the other hand, say they would struggle to monitor and collect any number of the hundreds of local and state sales tax rates that exist across the country."

Similar legislation has been introduced multiple times over the past several years.

Media:

Summary by Eric Revell
(Photo Credit: Flickr user Keith Williamson)

AKA

Marketplace Fairness Act of 2015

Official Title

A bill to restore States' sovereign rights to enforce State and local sales and use tax laws, and for other purposes.

bill Progress


  • Not enacted
    The President has not signed this bill
  • The house has not voted
  • The senate has not voted
      senate Committees
      Committee on Finance
    IntroducedMarch 10th, 2015
    Brick and mortar stores shouldn't carry the burden alone.
    Like (5)
    Follow
    Share
    As a small business owner primarily on the net, this would directly drive traffic away from me. Every dollar counts, and pushing people away so Walmart has to struggle less is pretty infuriating.
    Like (7)
    Follow
    Share
    Many of these businesses operate on small profit margins. Since the government was slow to act in the beginning, implementing a tax now would be unfair because these businesses are already operating with a certain budget which dissent account for a tax.
    Like (4)
    Follow
    Share
    You pay sales tax when you go to the store and buy not collecting sales tax from online purchases you're hurting your own local economy
    Like (3)
    Follow
    Share
    We DO NOT need any new taxes!! You are bringing in more revenue than any country in history. Any company can increase their brick and mortar presence with Internet sales. STOP TAXING US!!!
    Like (3)
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    I say No, because they are not brick and mortar businesses. That's why they are called "Online Shopping ".
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    States have no right to reach out of their state to steal money from anyone or anything.
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    We supposedly pay state and local taxes for state and local functions: police, fire departments, building and code inspectors, water treatment, etc because we use them. An Internet store that has a physical location in California, but ships to Idaho, doesn't need to be paying state taxes to Idaho for "services" it doesn't use. No internet sales taxes. Big stores are after the little Etsy markets, and would live to shut down small businesses who can't afford the increased cost of doing business. It's a scam.
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    The key to is bill is the wording on simplification of tax filing and collecting. All small businesses need to submit sales tax, why are small on-line stores exempt. If brick and mortar can collect and file so can everyone else. Currently this non tax is a stimulus package for on-line retail and this practice has out lived the potential ROI. On-line commerce will not suffer. As for the price increase, the market will determine if this is acceptable. This is not a given.
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    Just another way for government to get more money out of the people. No internet sales tax or tax on internet access.
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    No! If they can think of it, they'll tax it! That tax wasn't there before. We don't need it now.
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    An online sales tax disproportionately impacts small businesses. Plus, the taxes will be passed on to consumers in the form of higher prices.
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    Govt is already too greedy. Stay out of the internet.
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    This has been a huge loophole, and it's basically just stealing.
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    Again, government picking winners and losers. Taxation is theft. It is confiscation of private property.
    Like (1)
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    Anything the Federal Government does to interfere with the free market will be a disaster.
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    This would hurt online sales and discourage free market competition.
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    The internet is one of the few things that the government hasn't ruined yet. We don't need more taxes. Let the people keep their money. The government has taken enough of it.
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    I'm tired of everyone saying that everything is unfair. When you're buying from companies across state lines want not there should not be a tax on it not everything needs to have a tax.
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    I need more study and a more careful plan before I vote for a new tax that could hurt small businesses. But in general the playing field isn't level and something should be changed.
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