Like you didn’t see this coming… Sen. Dick Durbin (D-IL), together with Sen. Mike Enzi (R-WY), will, if all goes according to plan, announce intentions to impose a sales tax on internet sales. The bill, referred to as the Main Street Fairness Act in the Senate, is a companion piece to legislation bearing the same name currently stalled in the House.
The legislation is billed as intending to level the playing field between internet retailers and retailers who have an actual physical presence inside of a given state. “Why should out-of-state companies that sell their products online have an unfair advantage over Main Street bricks-and-mortar businesses?” Durbin asked recently in his home state of Illinois.
It may sound noble (and arguably, there are some real fairness issues at play here) but you and I know this is really about dollars. It’s estimated that requiring online retailers to collect sales tax from would result in revenue totaling a whopping $37 billion over a three year period.
But don’t count it as a win just yet. Those billions of dollars have a lot of faces behind them. Opposition to the bill, which hasn’t even been officially introduced, and its companion in the House is already growing, led by, not surprisingly, online retailers and legislators in states like California, which rely heavily on tech and online businesses. Cue Rep. Dan Lungren (R-CA) who has introduced the Supporting the Preservation of Internet Entrepreneurs and Small Businesses Resolution (yeah, the name cracks me up, too) which would block the imposition of any sales tax on online sales. H.R.5 which was introduced in early February 2011 currently sits in the Subcommittee on Courts, Commercial and Administrative Law.
So what does any of this mean? Really, nothing for now. Both sides are, I’m sure, lawyering and lobbying up. While nobody knows for sure what the outcome will be, I think we can all count on some kind of compromise bill eked out over time. A long time.Want more taxgirl goodness? Pick your poison: You can receive posts by email, follow me on twitter (@taxgirl) hang out with me on Facebook and check out my YouTube channel.