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Online Sales Tax Battle Continues

It appears that the only thing that house Democrats and Republicans can agree on these days are "Sales Tax Fairness" issues that have come before them. Both sides of the aisle agree that it's time to close the loophole that requires main street merchants to collect sales taxes from customers, while allowing most online retailers to offer tax-free shopping.

Two acts in front of the House and Senate are the Marketplace Fairness Act and the Marketplace Equity Act would bring fairness to the collection of sales taxes in the country. A 1992 Supreme Court ruling that a state cannot require a retailer to collect sales tax unless the retailer has a physical presence in the state is the loophole that allows many online sellers to bypass tax collections.

Local retailers are put at a great disadvantage these days with consumers eager to pay the lowest prices possible and the massive expansion of the internet lets them shop instantly at vendors throughout the country, A recent study shows that a level sales tax playing field for retailers could add as many as 15,000 jobs in the state of Ohio alone, where the study was conducted.

Small business owners are overwhelmingly supporting the changes explaining that many shoppers come into their stores to windowshop and then leave the store only to order it online to save the sales tax. It becomes impossible for local retailers to match competitors pricing when they need to factor in the tax obligations.

The argument on behalf of internet sellers is that the general public is required by law to pay a "use tax" on their tax returns. The response to that is that most people do not understand the "use tax" as well as that tax is easily avoided, rarely paid and hard to enforce.

The battle rages on and more hearings are expected by the end of the year.

Retailers Forum Magazine encourages our readers to contact their local Congressmen and Senators in support of fair sales tax collections.