U.S. Senator Mark Pryor today joined a bipartisan group of senators to introduce legislation that would put online and catalog retailers on the same playing field as Arkansas's brick-and-mortar businesses when it comes to collecting sales tax.
Pryor said that under the existing system, brick-and-mortar stores are required to collect sales taxes from customers who make purchases in their stores, while many online and catalog retailers are exempt. The Marketplace Fairness Act would give states the option to collect sales tax from out-of-state online and catalog retailers. Currently, states rely on consumers to report and pay equivalent "use" taxes.
"The Internet has matured. Consumers today are just as likely to shop online as they are on Main Street," Pryor said. "This legislation simply levels the playing field so our local companies and mom-and-pop operations are not at a disadvantage. It also allows states the ability to collect much-needed revenue that is already due to them."
The Marketplace Fairness Act would give states the authority to collect sales and tax revenues from out-of-state business with a new, simplified tax system. The legislation would provide states two options for collecting sales tax from online and catalog purchases. If states voluntarily joined the Member States of the Streamlined Sales and Use Tax Agreement (SSUTA), they would be able to require out-of-state businesses to collect and submit sales and use taxes after 90 days. If States do not choose to join the SSUTA, they would only be able to collect sales tax if they adopt minimum simplification requirements and provide sellers with additional notices on collection requirements. Online and catalog businesses who make less than $500,000 in total remote sales would not be required to collect the taxes.
The legislation is also supported by Senators Lamar Alexander (R-Tenn.), John Boozman (R-Ark.), Bob Corker (R-Tenn.), Dick Durbin (D-Ill.), Mike Enzi (R-Wyo.), Tim Johnson (D-S.D.) and Jack Reed (D-R.I.).