If Massachusetts Congressman Bill Delahunt has his way, the Main Street Fairness Act will become the law of the nation and an estimated $23 billion from online transactional sales taxes will be collected in 2012.
House Resolution 5660 aims to create a national definition for all 50 states to use to set taxes on internet sales, repealing the 1992 case of Quill v. North Dakota which set precedent by restricting internet commerce taxation.
Delahunt’s office released a statement on July 1, 2010 that reads, in part:
The Main Street Fairness Act provides Congressional authority for this interstate compact to take effect. This does not compel any state to join, but those that choose to adopt this system would then have the authority to require online retailers to collect and remit sales taxes the same way that businesses on local Main Streets do now.
Most importantly, it will help state and local governments balance their budgets without raising any new taxes and will not cost the federal government a dime.
We are facing unprecedented economic times and difficult choices. State officials are now coming to the Congress looking for billions for their schools, teachers and other vital public programs. However, our first priority ought to be to help states collect the billions in tax revenues that are already owed, but are being lost. Instead of raising new sales taxes – let’s collect these tax dollars first.
While I support equality in the retail industry to ensure online businesses collect the same sales taxes as brick-and-mortar firms, I must side with Internet Merchants Association president Fred Neff who makes a valid point when he spoke to American City & County magazine.
To me, it seems like it’s going to be such a daunting task that it’s going to force a lot of the small internet businesses to want to either leave the marketplace or not obey the law.
I am acquainted with many small business owners with internet-only presences. I’d hate to see them fade.