Washington, D.C. – U.S. Senator Amy Klobuchar today rallied support for legislation she cosponsored to level the playing field for local Minnesota businesses to compete against online retailers. Klobuchar is cosponsoring an upcoming amendment to the Senate’s Fiscal Year 2013 Budget Resolution that would signal broad bipartisan support for the Marketplace Fairness Act, which would give states the option to require out-of-state businesses, including online retailers, to collect sales taxes they are already owed.
“Businesses in Minnesota can’t compete if they don’t have a level playing field to compete on,”Klobuchar said. “The Marketplace Fairness Act would help get rid of the loopholes in our tax code that hurt brick-and-mortar businesses and cost our state money.”
Under current law, states cannot require out-of-state or online-only Internet retailers without a physical presence in the buyer’s state to collect the sales tax owed by state residents and businesses. Estimates put this lost tax revenue at roughly $23 billion in 2012.
The bipartisan Marketplace Fairness Act would give states the authority to require out-of-state businesses, including online retailers, to collect sales taxes if a state meets certain requirements, including an easily identifiable tax rate, uniform tax-base rules, and centralized filing and remittance of the sales taxes withheld.
The legislation would provide two options by which states could begin collecting sales taxes from online and catalog purchases. The legislation exempts small businesses that make less than $1,000,000 in total remote sales in the year preceding the sale.