Blunt sponsors internet sales tax bill

Printer-friendly versionPrinter-friendly version

Missouri News Horizon
JEFFESON CITY, Mo.
– In what could be a tectonic shift in the world of online retailing, a bipartisan group of senators in Washington are expected to file a bill this week that would pave the way for state and local governments to begin reaping tax revenue from purchases made over the internet.

Missouri’s Republican Sen. Roy Blunt is among the senators backing the bill, which they’ve dubbed the Marketplace Fairness Act. The bill would create a system where local and state governments have the option of forcing online retailers to collect those taxes – a practice that the vast majority have not traditionally done.

“The local community, the local merchant is at a significant disadvantage, if they’re selling a product for 6, 7 or 10 percent more than you can buy it over the internet, simply because the internet guy’s not collecting,” Blunt said.

Existing law only requires consumers to voluntarily pay sales tax, Blunt said. Not surprisingly, few actually due. The result is $23 billion in lost revenue for state and local governments across the country – a sum equal to the entire annual operating budget of the state of Missouri.

While speaking to reporters on Wednesday, Blunt stressed that proposed law is not a new federal tax.

Individual states would ultimately have the choice whether or not to start forcing online retailers to collect taxes. The bill would also provide a loophole for smaller retailers that make less than $500,000 annually in internet sales.

The bill is still a long way from passage, but it got a strong endorsement last month after the internet’s largest retailer, Amazon.com, agreed to start collecting taxes next year.