Online Retailers Have Different Takes on 'Marketplace Fairness Act'

November 10, 2011 -

Major online retailers are divided over a new legislation called The Marketplace Fairness Act that seeks to tackle the issue of charging sales tax for purchases made online. Right now states only require customers to pay a sales tax on purchases made online if the online retailer has a physical store address in the state. The problem for states that want to collect those revenues is that most online retailers like Amazon only have shipping or service centers in-state. Traditional brick and mortar retailers have long complained that online have an unfair advantage because of this fact.

The Marketplace Fairness Act hopes to change that. It was introduced Wednesday by U.S. Senators Lamar Alexander (R-Tenn.), Dick Durbin (D-Ill.) and Michael Enzi (R-Wyo.). If the bill passes it would give state governments several ways to collect sales taxes from online purchases. The first method would require states to sign a multi-state legal agreement that would bring each of their sales tax codes into conformity. States would then have the power to compel online retailers to charge or remit a sales tax. States that don’t sign the legal agreement can still make online retailers collect sales tax on purchased goods if they adopt minimum standards to simplify their collection process. All sellers with annual sales that total less than $500,000 a year would be exempt from collecting individual state sales taxes.

While Amazon has come out in support of the Marketplace Fairness Act, companies such as eBay have come out against the new legislation. EBay feels that it has nothing to gain from the bill since the majority of its money comes from fees it charges other sellers for using its online auction site. Depending on the state, the individual selling the product(s) is usually responsible for collecting sales tax from customers. While eBay does have its own retail business, it doesn’t have the agreements with states to waive sale taxes like Amazon has managed to negotiate.

We'll continue to follow the progress of this bill and let you know if it passes or falls by the wayside.

Source: VentureBeat


Comments

Re: Online Retailers Have Different Takes on 'Marketplace ...

Buying from a store I pay sales tax.  Buying online I pay shipping costs.  I see that as balanced.  If the law goes into effect then buying online I would have to pay sales tax and shipping costs.  It doesn't balance anything; it shifts the advantage to local stores.  The stores don't want fairness, they want dominance.  I get it, I don't begrudge them wanting to make money, but they aren't being honest about it. 

Re: Online Retailers Have Different Takes on 'Marketplace ...

You still pay for shipping at brick and mortar stores, it is simply bundled into the price of the item rather then broken out to make things look cheaper.

Re: Online Retailers Have Different Takes on 'Marketplace ...

Online you pay for:
 - "Product + Warehouse_area + Shipping + Tax"

In a Brick&Mortar store you pay for:
 - "Product + Store_area + Tax"

The cost for store_area and sales-people are so much greater for a "Brick & Mortar" store that they have no chance what-so-ever to compete with an online store. Even if they are taxed the same and you have to pay for shipping, products often end up being 20-40% cheaper online.

Though, you are right in that stores want dominance, which is why B&M stores blackmail publishers into raising online-prices for games by ridiculous amounts.

Stores that has no online-section, is a dying concept and trying to keep them alive is futile for they have no place in this day & age. They are obsolete.

Re: Online Retailers Have Different Takes on 'Marketplace ...

While this might feel true to gadget heads and computer people, keep in mind the majority of the US population still shops B&M, and a lot of people do zero shopping online.

They are only obsolete if one only cares about thier own demographic.

Re: Online Retailers Have Different Takes on 'Marketplace ...

Good points to all.

 
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Andrew EisenDude, you're comparing an opinion piece with someone who was shot to death. Gamasutra and Alexander already were accountable for the opinion piece in question.07/29/2015 - 11:25pm
Mattsworknamekinds of events. nor has it stopped them from being asshats in my opinion, but in there view, they have to hold someone accountible for recent events, so they are doing what they think they must, even if it's based on falsehoods07/29/2015 - 11:22pm
MattsworknameAndrew: It's really a matter of context for the people involved. For example. The "Black lives matter" thing is based on an entirely false account of events in the brown shooting, but that hasnt' stopped it from triyng to hold Polititcians accountable for07/29/2015 - 11:22pm
Andrew EisenWouldn't surprise me. A lot of words' actual meanings escape many people on the internet.07/29/2015 - 11:17pm
Andrew EisenSo, "they must be held accountable" means "we must hurt them for publishing an opinion piece we don't like."07/29/2015 - 11:17pm
Mattsworknameor me thats demanding accountability on this, it's the ones who undertook the actiosn against these sites and went after the advertisers07/29/2015 - 11:13pm
MattsworknameJust cause you or I disagree with there response, they still feel they have a right to hold Groups like kotaku, gamasutra, Gawker, ET all, to account for what they felt was a vile and inappropriate action. Regardless of your or my view on it, it's nto you07/29/2015 - 11:13pm
Mattsworknamebetrayed or insulted by the articles in question, then they will feel a need to hold those media groups, regardless of intent, to account for that action, be it right or wrong.07/29/2015 - 11:12pm
MattsworknameAndrew: :target audience or not, if a large enough portion of our audience has a given view point Andrew, then you risk aggrivating that audience at your own peril. your question has been answer. if a large enough part of a media groups audience felt07/29/2015 - 11:11pm
Andrew EisenMy original question (which I've posed to you four or five times now) still stands.07/29/2015 - 11:04pm
Andrew EisenMatt - Yes, non-industry folk are welcome to and do read Gamasutra. That doesn't change the fact that they're not the site's target audience. Which wasn't my point anyway, merely an offered clarification as you keep referring to it like it's IGN.07/29/2015 - 11:04pm
MattsworknameNo different then GG ttrying to get Vox, Kotaku, gawker, and other such sties to fold cause they disagree, it's not right, but it's also the most common and most widely used of methods now adays.07/29/2015 - 10:21pm
MattsworknameTechnogeek: No, there isn't, you or I have no right to say someone cant say something, no matter how much we may dislike it. Even if you hate what they said, they have a right to say it. trying to shut someone down cause you don[t like what they say, is07/29/2015 - 10:20pm
Mattsworknameexamples of movments like what happend with those articles that occured with other, much bigger incidents.07/29/2015 - 10:18pm
Mattsworknameto the articles posted on gamsutra and elsewhere with such intensity. As i've pointed out, we have plenty of examples of this same exact actions taken by other groups. As I pointed out, this kinda thing happens alot now, and I can share some big07/29/2015 - 10:18pm
MattsworknameAndrew, sorry for taking so long to reply, been busy all day. To answer you queston, you keep pointing out gamasutra was popular with industry folks. Yes thats true, but it had a BIG following among game enthusists and they were among those that responded07/29/2015 - 10:16pm
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Andrew EisenPHX - Yep, we linked that interview last week. http://gamepolitics.com/2015/07/24/gearbox-founder-has-nothing-praise-aliens-colonial-marines-duke-nukem-forever07/29/2015 - 8:42pm
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