Is Bill to Tax Online Purchases Fair or Foul?

Revenue-seeking local officials who favor the passage of legislation to tax online purchases are running short of time for Congress to enact such a law before it adjourns in December.

Rep. Steve Womack, a Republican from Arkansas and the sponsor of H.R. 684, remains hopeful that the bill will be passed this year but so far only 66 co-sponsors have signed onto it and the proposal has not advanced since going to a House subcommittee during February 2013. The revenue-producing bill is aimed at obtaining the same sales tax from Internet retailers that brick-and-mortar stores must charge their customers.

The current law is ???unfair??? because it requires stores to collect sales tax of 5-10 percent, varying state to state, that online retailers do not need to charge, said Priya Ghosh Ahola, principal associate at the National League of Cities. The group represents 19,000 cities, towns and villages, including many that have cut budgets and reduced staff during the economic downturn but still face hefty new expenditures for infrastructure.

???The bill is good for our residents and communities by allowing local governments to collect an estimated $23 billion in uncollected sales taxes on remote sales, allowing cities to provide basic services, such as infrastructure investment and public safety, at no cost to the federal government,??? Ghosh Ahola said.

The House bill, also known as the Marketplace Fairness Act, has attracted 41 Democrats and 25 Republicans as co-sponsors.

Read the rest of Paul Dykewicz’s column at Eagle Daily Investor.