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Published on Tuesday, December 4, 2012

Federal SST legislation this year?

Late last week, federal streamlined sales tax legislation had an opportunity to advance in the U.S. Senate when an amendment was proposed to add the Marketplace Fairness Act to the Defense Authorization Bill.

Unfortunately, the amendment was not considered and will not move forward. We will likely see additional efforts to move this legislation before the end of the year.

Thank you to all of our city officials who contacted Senators Murray and Cantwell in response to our action alert. We will continue to support and monitor this important legislation.

Background

The Marketplace Fairness Act will provide states and local governments with the authority to require out-of-state sellers to collect sales tax. It does not create or increase any taxes. Consumers already owe sales tax on the goods they purchase; however, there is a very low compliance rate in paying this tax.

At a time when our cities and towns face unprecedented and severe budget gaps, having the authority to collect sales taxes owed on internet or out-of-state purchases is essential. The Washington State Department of Revenue estimates it would generate $176.5 million for Washington local governments and $306.5 million for the state during the 2013–2015 biennium.

Some Washington cities have been concerned about previous proposals that would also have included state centralization of sales and telecommunications taxes. The Marketplace Fairness Act does not require state centralization of sales tax collection nor does it address telecommunications taxes.

The Marketplace Fairness Act is a bipartisan proposal from Senators Richard Durbin (D – Illinois), Michael Enzi (R – Wyoming), and Lamar Alexander (R – Tennessee).

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