Analysis Of The Marketplace Fairness Act

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During the 113th Congress, the United States Senate voted 69-27 to pass the Marketplace Fairness Act of 2013 bill on May 6th 2013. The Marketplace Fairness Act of 2013 (MFA) is a proposed legislation that would require online vendors to collect and submit all their sales tax and use tax. The bill still needs approval from the House of Representatives before it can become a law .Supporters of the bill are large retailers like Sears and Target, who claim they are at a price disadvantage because they have to charge sales tax on every sale while online retailers do not. On the other side are e-commerce companies such as eBay and Overstock.com, as well as small online merchants, who say that complying with 45 state sales laws and more than 9,000 jurisdictions is too much complicated and costly .
According to Congressional Digest, electronic commerce has enjoyed unfair advantage for many years by not having to acquire some taxes. The government is mainly responsible for this one-sided playing field toward online sellers. Many authorities believe that the Internet is essential to high productivity and economic growth and that preservation of the Internet potential is important. Indeed, president Bill Clinton signed the Internet Tax Freedom Act law in 1998 to prohibit any Internet access taxing – extended by succeeding presidents ever since.
Based on the current tax laws, online store merchants collect sales tax from in state consumers as similarly as “brick and mortar” stores charge sales tax when customers come into their stores. Online merchants, however, do not collect sales tax from consumers who shop from a different state. Out of state consumers are subject to a different tax, a use tax which is “a tax imposed on the use of certai...

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...eement – a collaborative achievement between state government and business community. Nevertheless, the Marketplace Fairness Act has a very slim chance to win the House of Representatives, because in spite of its simplified and modernized tax measure, the act will not eliminate the problem of complex multistate tax policies. Since each state has its own unique laws and tax codes, it is practically impossible to compel every state to follow the same simplification tax rule. Besides, given the heated controversy and universal impact of the bill, the politicians will look for ways to slow down the enactment as similar trouble has happened to the universal Obama HealthCare. No matter if the bill is enacted or not, one thing is certain that nothing is going to deter people from shopping online (not even sales tax) because shopping online is just too cheap and convenient.

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