Tax & Accounting Blog

Sales Tax: Marketplace Equity Act Introduced in Congress

Indirect Tax, ONESOURCE, Sales and Use Tax, Sales Tax Nexus October 24, 2011

Last week Representative Steve Womack (R-Arkansas) and Representative Jackie Speier (D-California) introduced a bill dubbed the  Marketplace Equity Act (MEA). If passed this legislation would give all states the authority to require online retailers with no presence in the state to collect sales tax from residents who buy their products.

MEA gives states greater flexibility than The Mainstreet Fairness Act proposed earlier this summer, allowing them to choose one of three ways for the tax to be calculated. The bill would require states to simplify the process for out-of-state retailers, including providing a single sales tax rate, designating a single source for remitting sales taxes from out-of-state sales, and establishing uniform rules for what sales are taxable. Small retailers with annual in-state sales of less than $100,000 and national sales of less $1 million would be exempt from having to collect taxes on out-of-state sales.