retail news in context, analysis with attitude

The New York Times reports that the US Senate voted 74-20 to begin debate about legislation that would allow states to force online retailers to collect sales taxes.

But agreeing to debate something is not the same as passing it. As the Times reports, "The bill, known as the Marketplace Fairness Act, is that rare piece of legislation that has turned Democrat against Democrat, Republican against Republican and business against business, while uniting states as different as New Hampshire, Montana and Oregon — which have no sales taxes — against virtually every other state."

Traditional bricks-and-mortar retailers support the legislation, while many online retailers - not to mention people who oppose new or all taxes - oppose it. But not Amazon, which is willing to trade the tax issue for the ability to operate distribution facilities in many states, which will enable it to ramp up its offering of same-day and next-day delivery.

The Times writes that "the bill would allow states to require all Internet sellers to collect sales taxes for the state and local governments of the buyers. State governments would be required to provide software free to Internet retailers to calculate sales taxes. Online retailers with out-of-state sales of less than $1 million a year would be exempt."

The Senate is expected to debate the bill and vote on it by the end of the week, though it remains to be seen how it will fare in the House of Representatives. President Barack Obama has said he will sign the bill if it makes it to his desk.
KC's View: