Online retailers could soon be preparing for potential changes in the way they do business, most notably the expansion of sales tax to more online purchases.
 
The Marketplace Fairness Act was introduced earlier this year, and it would allow states to tax consumers for online sales. This could have big implications for businesses both online and offline. 
 
Online businesses like eBay.com are often able to undercut brick-and-mortar stores with much lower prices. If sales tax is in play, the total price will likely end up higher than consumers are used to. This could impact where consumers end up buying.
 
3 things will likely happen if the Marketplace Fairness Act becomes law:

• Online prices will rise to compensate for the tax.

• Consumers will be more likely to shop locally if prices are similar.

• Tax revenue will increase in the states where online purchases are made.

The change is no surprise, as an expected $23.3 billion in sales tax was not collected last year on online purchases. However some companies are supportive of the bill. This excerpt from a letter to Congress written by Paul Misener, VP of Amazon explains why the company sees it as an advantage:
 
“I am writing to thank you for your bill, which will allow states with simplified rules to require sales tax collection by out-of-state sellers who choose to make sales to in-state buyers."

Currently, online sales tax is typically collected when the business has a physical presence in the same state as the buyer. The Marketplace Fairness Act would allow states to collect taxes for all online purchases, regardless of the business's location.

For more information, visit www.marketplacefairness.org.