As the world gets more connected online, the governments of the world want more of a powerful influence inside this portal to another world.
The Internet has a rather powerful social sway – this stopped CISPA, the Cyber Intelligence Sharing & Protection Act, from passing through the Senate this past week, amongst other reasons.
The Marketplace Fairness Act is the newest piece of legislation passing through the Senate. The bill will make you pay tax for online purchases, as you would normal purchases.
Internet sales tax
The bill was passed by the Senate last week and has been pushed to the final vote, President Barack Obama has given his support for the bill to be accepted. This is the second time the bill has appeared, in 2011 it was rejected by the Senate.
The Marketplace Fairness Act will tax any company online earning more than $1 million a year, to fit with the standards of commercial tax in the real world.
Currently, companies without any brick and mortar buildings in your state cannot collect sales tax, yet companies with brick and mortar and online businesses can.
The bill will make sure all payments will have a sales tax, for any business earning over $1 million per year. This will make sure even if you purchase from a company without any brick and mortar buildings in the state, they can still tax you.
This “internet tax” will hopefully bring a universal tax into the online marketplace, making sure no loopholes between states are found.
For the bill
There are a lot of people for the bill – not just the senators and house representatives, but online retailers like Amazon.
For these senators, it means more money coming into the economy for the state. This could be a large amount depending on the state, especially if a lot of online business is done there.
For online retailers, it makes sense to be billed equally no matter where the company warehouses are based. It is also great for brick and mortar companies as they will get equal competition with the sales tax.
Against the bill
eBay is one auction house completely opposed to the idea of an Internet sales tax, at least in its current form. The company believes this will make it harder for online retailers working on eBay to compete with the likes of Amazon.
The company has thousands of stores set up, allowing companies to sell their stock through eBay. This has been a very good format so far for the e-commerce giant, but it could be under threat by the Internet sales tax.
eBay wants the company to push the minimum amount required per year to pay Internet sales tax pushed to $10 million, instead of $1 million.
How this will affect buyers
In theory, this will just make the bridge between online to brick and mortar a little less broken. The bill will allow tangible goods to be taxed if you state has sales tax.
Note this is only for tangible goods, there will be no Internet sales tax on anything purchased online, like DLC for a video game or a payment for a Netflix account membership.
While the bill does have quite positive reactions, with Senate Yay-Nay vote 63 – 30 in favor of the bill, it is not completely secure and we have seen how the Internet can get riled up.
It isn’t a very controversial piece of legislation and has not angered many politicians, online retailers or the public to the point it has become degraded.
