This has been gathering steam for some time, of course. Last year legislation was introduced in Congress to force Internet retailers to collect local and state sales taxes. Proponents of the Marketplace Fairness Act have maintained it will at long last put brick-and-mortar stores on an equal footing with their online competition.
But states, too, have been eyeing the huge windfalls the Internet sales tax will bring. They’ve been losing billions in sales tax revenue to Internet companies – and since sales taxes make up about one-third of all state tax revenue in the states that do have sales taxes, according to Lucy Dadayan of the Nelson A. Rockefeller Institute of Government, this is a big hit due to “consumer spending shifts toward lightly taxed services and the difficulty of collecting taxes on Internet-related transactions,” as Dadayan told Stateline/PEW.
Still, here’s a question for American consumers: Do we really need another new tax when we engage in a transaction? Is the Marketplace Fairness Act really going to help spur economic growth – or put the breaks on it even more?