Tax & Accounting Blog

United States Senate Passes Marketplace Fairness Act

Sales and Use Tax, Sales Tax Calculation, Sales Tax Nexus May 8, 2013

On May 6, 2013, the United States Senate Passed the Reid amendments to S.743, the Marketplace Fairness Act,  on a bipartisan vote of 70-24.   The Marketplace Fairness Act imposes an obligation on out-of-state sellers to collect sales tax for companies with remote sales in excess of $1,000,000.  S.743, Section 2 (c).  Sellers who sell into Streamlined Sales and Use Tax states will be subject to the collection requirement if the market state adopts the Marketplace Fairness Act.

“This so-called Marketplace Fairness Act,” Senator Ron Wyden (D), Ore. stated on the floor of the Senate, “would require the State of New Hampshire, a state that does not have a sales tax, to collect sales taxes for the State of Indiana.”  Senator Richard Durbin (D), a supporter of the bill disagreed, stating the bill reflects the fact that, “Commerce has changed in the United States.”

Alaska, Delaware, New Hampshire, Montana, and Oregon currently have no State level sales taxes.  Businesses in those states would be required to collect sales taxes on sales to Streamlined Sales and Use Tax states that have adopted the Act.

The bill now moves onto the House of Representatives, where its passage is less certain.