Taxing Online Sales: E-Fairness, or Destroying Small Online Businesses?


Congress doesn’t come back from recess until after the November election — but they already know what they will be talking about when they finally get back to work.

Today’s featured bill — the highly contentious Marketplace Fairness Act (MFA)— is primed to be at the top of the Senate schedule after the midterm elections.

S. 2609 would authorize states to collect sales taxes from out-of-state retailers who sell and ship products to consumers within their borders. I would also prevent you from being taxed for your internet access until 2024. This bill would effectively end an online retailers’ ability to avoid paying sales taxes on transactions that happen in states where they do not have a physical presence - like a store or office. At the center of this bill is the question: Should states have the right to collect sates tax revenues from online retailers that are not physically located within their borders?

“A sale is a sale,” cry the supporters of MFA, saying that it’s unfair for online retailers to get a tax break when businesses that have physical locations have to pay up. By making online retailers comply with state tax mandates, this bill is also considered an huge step in evening the playing field between online stores and stores with physical locations. Supporters also point to the hope that the bill would give states a $23 billion influx of revenue from taxes that are already owed.

Opponents mostly argue that MFA would devastate small businesses that would have to comply with 50 different tax codes, among other issues:

Where do you stand? Is this bill a way to create e-fairness between online retailers and stores with physical locations? Or does it force online businesses to comply with an inane number tax codes while stripping them of profits? Let your congressional lawmaker know how you feel over at the Countable site!