On March 25, 2013, the U.S. Senate narrowly passed a budget by a vote of 50–49. The budget included several amendments added the previous day. One amendment gives states more authority to collect sales tax from out-of-state online retailers. If the amendment were to become law, individual states would have the authority to impose collection and remittance duties on out-of-state retailers for sales delivered within each respective state. Supporters of the amendment claim it would put local brick-and-mortar businesses level with online retailers that currently have a competitive advantage by not charging sales tax. Opponents claim the amendment will prove burdensome on local businesses as they try to comply with sales tax rules and filing requirements from many jurisdictions.
The budget passed by the U.S. House of Representatives sets a very different course. It is unlikely that the Senate budget will move any further as is. The actual final budget will probably result from negotiations between both parties in both houses. It is not known whether Congress will ultimately grant states the additional authority to enforce their sales tax laws, but the out-of-state online amendment could be seen as a step in that direction.
If you have any questions regarding this subject or other issues, please contact Javier Siervo at JSiervo@brg-expert.com or 202.480.2735.
The views expressed in this article are those of the authors and do not necessarily reflect the position or policy of Berkeley Research Group, LLC.
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