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Local News

May 1, 2013

Area shops: Web tax levels playing field

Small businesses and state treasuries could get some help from Congress this year as it moves toward requiring large Internet vendors to collect state sales taxes.

It’s a bill that brick-and-mortar stores have long supported.

“If this act can put us on a level playing field with some of the … large corporations … it may turn out to be a good thing,” said Anna McLaughlin of McLaughlin’s, which has stores in Oneonta and Norwich.

The Senate could approve the Marketplace Fairness Act as early as Monday.

Both of New York’s senators support the bill, which has received as many as 75 votes in Senate tests.

A spokeswoman for Sen. Kirsten Gillibrand said Tuesday: “Senator Gillibrand supports this common-sense, bipartisan bill to close an unfair tax loophole and level the playing field for New York businesses.”

Sen. Charles Schumer’s office did not respond to a call for comment.

The Marketplace Fairness Act would require all retailers with at least $1 million in interstate sales to collect sales tax based on the buyers’ locations.

To be covered by the bill, states would have to pass legislation that would, among other things, simplify their sales-tax codes, and they would have to commit to providing free software to retailers it covers. The software would enable the vendors to calculate the tax rate for each buyer.

Technically, buyers are required to report their purchases and pay sales tax to state agencies, but compliance is low and enforcement difficult, prompting many states — New York being among the first — to pass laws that compel online retailers to collect the tax, just as brick-and-mortar stores do.

Those stores complain that their obligation to collect sales tax — something the Internet vendors don’t have to do — puts them at a competitive disadvantage on price.

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