USA – Market Place Fairness Act – update

The Senate of the US Congress has passed the Market Place Fairness Act  on 6 May with bi-partisan support by a vote of 69 to 27. The legislation is meant to put online vendors on equal standing with “brick and mortar” stores in regard to tax collection. Currently most of the online vendors do not charge sales tax unless they have some sort of physical presence (i.e. “nexus”) in the state where they are selling to, while high-street stores have to charge local sales tax at their location.
According to the bill US online vendors with over $1 million in annual online revenue will be required to pay state and local taxes to the governments of the states where their customers reside in. Considering that there are nearly 10,000 different state and local tax jurisdictions within the US,  commentators warn that this might end up being a too big burden for a lot of small and medium sized online business which could face difficulties to comply with all the various compliance and other administrative obligations.
There is still time for getting prepared. Even if the House of Representatives pass the bill, it will not enter in force until the autumn.

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