The House Judiciary Committee held hearings on March 12, 2014, to explore alternatives to the current Marketplace Fairness Act, a bipartisan bill that passed in the Senate but is stuck in the House. Rep. Bob Goodlatte, chairman of the House Judiciary Committee, as we’ve previously noted, is looking for a better way to make an online sales tax bill feasible for compliance for online sellers. His seven tenets of a sales tax bill are his road map to better sales tax legislation that will make sales tax easier and transparent for all. The hearings focused on testimony about origin-based sales tax, instead of using the conventional destination-based system that is in place in most states now. If you’re unfamiliar with what this means, be sure to read our article that explains the basics of designation and origin-based sales tax. You can see all the testimony on the Judiciary Committee page on “Exploring Alternative Solutions on the Internet Sales Tax Issue,” but one thing is clear—there is no consensus.
Whether you’re an online seller or a brick-and-mortar retailer, a manufacturer, or a consumer, the MFA and its alternatives might be important to you. As e-commerce becomes an increasingly important part of purchasing for businesses and consumers, attempts to regulate online sales tax might turn into attempts to change the entire sales tax system. Remember that any bill that the House passes will need to be joined with the Senate bill because it is unlikely they will be the same at this point in the discussions. Any bill the House passes could still be ended by gridlock as the two attempts to agree. Our newsletter will keep you up to date as the story unfolds.