The U.S. Senate passed the Marketplace Fairness Act May 6, which looks to allow state and local governments to enforce sales and use tax laws for online purchases.
The bill could help Connecticut to collect about $152 million in additional tax revenues, according Sen. Chris Murphy. A parallel bill awaits action in the House of Representatives, where a hearing has yet to be scheduled.
Murphy applauded the passage, saying the act will allow Main Street retailers to compete on the same level as out-of-state retailers for online sales while allowing states to collect more tax revenues and relieving consumers from having to report what they owe on online purchases.
“Right now, someone can walk into a shoe store in Connecticut, try on a pair of shoes, ask for advice from a salesperson, and then walk right out of the store and use a smartphone to buy those same shoes online without paying sales tax,” Murphy said in a prepared statement. “This system is ridiculous and shortchanges states by nearly $23 billion in much-needed revenue each year, and puts giant online retailers at an unfair advantage over smaller local businesses in Connecticut and across the country.”
Opponents of the bill say it puts an unfair burden on small online companies that don’t have the ability to collect and report taxes in each of the states they sell products in. President Barack Obama has said he supports the measure.
