As we have said before, we support passage of the Marketplace Fairness Act (known commonly as the Internet sales tax bill) by Congress, largely because it levels the playing field for so-called "brick-and-mortar" local retailers.
Because they are required to collect local and state sales taxes, local retailers in Iowa - many of them small operations - face a competitive disadvantage with (often-large) online sellers who are not so required.
So we were pleased the Senate passed (by a 69-27 vote) the MFA earlier this month.
The legislation gives states the authority, if they choose, to require online retailers - even if they lack a physical presence in the state where the customer lives - to collect sales tax at the time of a transaction, just like local retailers are required to do. States who seek collection authority first would be required to take one of two steps to simplify their sales tax laws in order to streamline multi-state sales tax collection. This is important to insure the process isn't unduly burdensome for remote sellers.
As we said in an August 2012 editorial, we aren't advocating for a new tax; rather, it's an effort to take down a barrier behind which some sellers avoid collection of existing taxes others must collect. This isn't an anti-business position; it's a fairness position.
Most observers consider the biggest battle for passage of the act by Congress will be waged in the House, where the legislation moves next. President Obama promises to sign the bill if it reaches his desk.
We encourage Iowa's House delegation to get behind the MFA and work for its passage in their chamber.