Sales Tax Fairness Roundup

Congress to Take up E-Fairness Post-Election

Senate Majority Leader Harry Reid (D-NV) said that passing e-fairness legislation will be at the top of the Senate’s to-do list following the mid-term elections, as reported by The Hill. Reid said he would do “whatever it takes” to pass the Marketplace Fairness Act, legislation that would allow states to choose whether to require remote retailers to collect and remit sales tax to states. “That is long, long overdue,” Reid said told The Hill.

Last year, the Senate overwhelmingly passed the Marketplace Fairness Act (MFA). However, with little progress on the bill occurring in the U.S. House of Representatives, MFA sponsors believe adding the e-fairness legislation as an extension of the Internet Tax Freedom Act, a law that prohibits states from levying taxes on Internet access, might help it pass. The moratorium on access taxes was set to expire on November 1, but it was extended until mid-December.

In July, the U.S. House of Representatives passed its own extension of the law, the Permanent Internet Freedom Act, which would extend the tax ban permanently. The Hill article points out, however, that both Speaker John Boehner (R-Ohio) and House Judiciary Committee Chairman Bob Goodlatte (R-VA) oppose the MFA in its current form.

Rep. Jason Chaffetz (R-UT) is also drafting e-fairness legislation which is also expected to be introduced sometime after the November elections.   

Amazon to Collect in Two More States: Minnesota and Maryland

Beginning October 1, Amazon will be collecting and remitting sales tax in Maryland and Minnesota.

Under a deal that Amazon made last year to open a fulfillment center in Maryland, starting October 1, the online retailer will begin collecting and remitting sales tax to the state. As reported by IntheCapital, the deal is expected to be a “big boon for the state’s finances” as it is estimated that it will increase sales tax revenue next year by 5.2 percent, to $4.15 billion.

As part of the deal, Amazon is expected to receive $40 million in state and local tax credits in exchange for building the facility, and the company has promised to bring 1,000 jobs to the distribution center. WBAL reported last year that each job will “cost taxpayers about $40,000 in tax credits.”

Back in June 2013, after Minnesota’s legislature passed an affiliate nexus e-fairness bill, Amazon and other remote online retailers terminated their affiliate programs in Minnesota to avoid triggering nexus, as reported at the time by the Minneapolis Star Tribune. Now, over a year later, reports are that Amazon.com will begin collecting sales tax in Minnesota on October 1, according to the Minneapolis/St.Paul Business Journal.

Ty Rogers, a spokesman for Amazon.com, told the Business Journal: “We’re considering various opportunities and plan to expand to Minnesota.”

Dave Brennan, co-director of the Institute for Retailing Excellence at the University of St. Thomas, told the Journal that he believes Amazon will begin collecting in advance of opening a warehouse or warehouses in the state so that the retailer can offer same-day delivery in the state.

Amazon now collects and remits sales tax in 23 of the 45 states that have sales tax.