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Carney: Online sales tax will ‘level the playing field’

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By Doug Powers  •  April 23, 2013 01:41 PM

**Written by Doug Powers

Yesterday, the Senate voted 74-20 to end debate and move forward with a final vote on The Marketplace Fairness Act, which would allow states to collect online sales taxes:

The strong vote to end debate suggests supporters of the bill are likely to see it win approval in the Senate this week. Its path through the House, despite the support of many GOP governors, is less clear.

Senators in states without a sales tax voiced opposition to the bill Monday, arguing it would burden retailers in their states by forcing them to collect taxes for other state governments.

“I strongly oppose this measure because it would put a serious burden on small businesses that rely on the Internet to tap into growing markets, expand their operations, and create jobs,” Sen. Jeanne Shaheen (D-N.H.) said Monday. “Mandating that small businesses collect sales taxes for an additional 46 states and 9,600 tax jurisdictions would overload these entities with bureaucracy and red tape.”

The bill would exempt small businesses that earn less than $1 million annually from out-of-state sales.

Jay Carney said the tax would “level the playing field,” and I believe him, because nobody is more adept at bulldozing an economy than this administration:

QUESTION: This is a different issue. Does the President support legislation allowing states to require Internet retailers to collect sales taxes? And if that were to pass, would he sign that into law?

JAY CARNEY: We believe that the Marketplace Fairness Act will level the playing field for local small business retailers who are undercut every day by out-of state online companies. Today, while local small business retailers follow the law and collect sales taxes from customers who make purchases in their stores, many big business online and catalogue retailers do not collect the same taxes. This puts local neighborhood-based small businesses at a disadvantage to big, out-of-state, online companies. And because these out-of-state companies are able to cut corners and play by a different set of rules, cities and states lose out on funding for K-12 education, police and fire protection, access to affordable health care and funding for roads and bridges.

“Level the playing field”? Not entirely. For Amazon.com, the legislation could however help level some competition, which is partly why the company support the bill that could help put the squeeze on their smaller rivals:

Collecting state and local sales tax all around the country would require a fair bit of effort on the part of online retailers, because sales tax rules vary from state to state. That’s not a huge deal for a giant company like Amazon, but it would be more of a burden for smaller online retailers. From Amazon’s point of view, that’s a good thing — it makes life harder for Amazon’s smaller competitors.

Ditto for Wal-Mart. That must present a quandary for those lawmakers who must decide between their love of taxation and their hatred for Wal-Mart. But in the end, after brief soul-searching, more taxation will win the day.

As with any government effort to “level the playing field,” you’ll have to wait until the earth movers are finished to find out which side of the dirt you end up on.

Click the pic to roll the Carney Cam and watch the press sec explain how this bill will help local smaller retailers through these trying economic times by making other companies pay additional taxes (the cost of a more “level playing field” will, as always, be passed along to consumers):

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**Written by Doug Powers

Twitter @ThePowersThatBe

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