The Sale Might Be Over For Internet Shoppers If Federal Bill Passes

Online shoppers, who enjoyed avoiding paying sales tax for their out-of-state purchases, probably won't be happy if a bill pending in Congress becomes law.

The Marketplace Fairness Act, which passed 69-27 in the U.S. Senate on Tuesday, allows states the authority, and option, of collecting taxes on Internet and catalog sales. The act does not create a new tax.

But it does allow states the option of collecting the taxes, which they are already owed. However, the legislation does exempt small businesses that make less than $1 million from collecting the tax.

U.S. Sen. Tammy Baldwin (D-WI) voted for the bill, but Sen. Ron Johnson (R-WI) did not.

“Today, I joined a bipartisan majority of the U.S. Senate in support of the Marketplace Fairness Act," Baldwin said in a statement. "This pro-growth measure will level the playing field for Wisconsin small businesses and allow local brick-and-mortar retailers to compete more effectively against out-of-state Internet sellers."

Johnson said he liked the idea of the bill, but felt the legislation placed “too much of a burden on online retailers” and he couldn’t support it.

“In particular, I am concerned about states' auditing rights and the lack of segregation of collected taxes from online retailers’ general cash funds,” according to a statement he released.

However, Johnson said he hopes the House will take up the bill, make changes to it and send it back to the Senate for final passage.

Want to weigh in on this issue before the House votes? You can reach out to U.S. Rep. Gwen Moore via his online contact form or by calling his office at (202) 225-4572.