In the past, we have documented online sales tax in the United States and the three tax Acts which were currently in the Senate, one being the Marketplace Fairness Act. Last week, the U.S. senate voted 75-24 in favor of a non-binding resolution for an amendment to support the Marketplace Fairness Act in its 2014 budget plan. In doing so, the United States has taken another step towards taxing eCommerce transactions.
What do you need to know about the Marketplace Fairness Act? We answer a few questions on the topic below…
What exactly is the Marketplace Fairness Act?
The Marketplace Fairness Act is an online sales tax bill which would allow all states who participate to collect sales tax from eCommerce transactions that take place online. The main purpose of the Act is to create a “fair” playing field for all retail transactions by taxing all purchases regardless of the purchasing channel.
Under the Act, each state has the choice to set up their own tax requirements or they can partner with other states to create specific tax criteria which would apply to all of the states who collaborated on the effort. Businesses with revenue of $1,000,000 or less in total annual out-of-state sales would be exempt from the Marketplace Fairness Act, meaning the main target of the Act is larger eCommerce companies. (more…)