The Green Sheet Online Edition
May 25, 2015 • Issue 15:05:02
A rationale for the MFA
Dale S. Lazig, Staff Writer at The Green Sheet, received the following note from Sen. Bob Casey, D-Pa., in response to her inquiry about the Marketplace Fairness Act:
Thank you for taking the time to contact me with your thoughts on taxes applied to internet purchases. I appreciate hearing from you about this issue.
Under current law, a state cannot compel out-of-state vendors to collect sales tax on purchases made by its residents. As a result, if a merchant in one state ships a product to a consumer in a different state, the merchant is not required to collect and remit the sales tax imposed by the home state of the consumer. Therefore, as a practical matter, many internet purchases are tax free, placing traditional retailers at a disadvantage.
On Feb. 14, 2013, Senator Michael B. Enzi of Wyoming introduced the Marketplace Fairness Act, which would address the administration and collection of state sales taxes on purchases made online. Under this legislation, states that complied with certain simplification requirements, including establishing a uniform sales tax base throughout the state and providing free compliance software to retailers, would be permitted to require out-of-state vendors to collect and remit sales [taxes] on purchases made by their residents. Small businesses would be protected by an exemption for retailers with annual remote sales of less than $1 million.
The bill would not raise any federal tax revenue. Instead it would simply allow states to collect the tax they are already owed. Pennsylvania, like many other states, already requires its residents to pay applicable sales and use taxes on all purchases, regardless of whether they take place online or at a physical store. The Marketplace Fairness Act would allow Pennsylvania to collect these unpaid taxes, providing an estimated $700 million a year for the Commonwealth's budget.
On May 6, 2013, I voted in favor of the Marketplace Fairness Act, which passed the Senate by a vote of 69-27. The bill was under review by the House of Representatives when Congress concluded legislative action for the 113th Congress. In order for this legislation to be considered again by the Senate, it must be reintroduced in the 114th Congress, which began on Jan. 6, 2015. Please be assured that should this or any similar legislation come before the Senate for consideration, I will have your views in mind.
Again, thank you for sharing your thoughts with me. Please do not hesitate to contact me in the future about this or any other matter of importance to you.
For more information on this or other issues, I encourage you to visit my website, http://casey.senate.gov. I hope you will find this online office a comprehensive resource to stay up-to-date on my work in Washington, request assistance from my office or share with me your thoughts on the issues that matter most to you and to Pennsylvania.
Bob Casey, United States Senator
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