According to various media reports, Sen. Dick Durbin, D-Ill., plans to re-introduce legislation next week that would allow states to force out-of-state retailers to collect local sales taxes via the Streamlined Sales Tax Agreement. The Senate is currently in recess until May 1, 2011. The bill, named the Main Street Fairness Act, was introduced to the House on July 1, 2010 by former Rep. William Delahunt. It was not brought up for a vote.
The House bill is different from Main Street Fairness Act that was recently passed in Illinois and Arkansas. This law, like the “Amazon Tax” or “Affiliate Tax” law first passed in New York in 2009, states that a sales tax nexus is created when online retailers enter into marketing agreements with affiliates who send customers to Amazon through links on their own web sites and get a marketing fee for those sales. In 2010, North Carolina and Rhode Island enacted this legislation. Currently, the law is pending in Connecticut. It has been introduced or re-introduced in California, Massachusetts, Minnesota and Texas.
Full Members of the Streamlined Sales Tax Agreement include Arkansas, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Nebraska, Nevada, New Jersey, North Carolina, North Dakota, Oklahoma, Rhode Island, South Dakota, Vermont, Washington, West Virginia, Wisconsin and Wyoming. Full Members are states that are in compliance with the Streamlined Sales and Use Tax Agreement through its laws, rules, regulations, and policies. Associate Members include Georgia, Ohio, Tennessee and Utah. Associate members are states that are in compliance with the Streamlined Sales and Use Tax Agreement except that its laws, rules regulations and policies to bring the state into compliance are not in effect but are scheduled to take effect no later than 12 months after becoming an associate member.
Full text of last year’s HR 5660 – Main Street Fairness Act 2010
The bottom line is, if you’re not already paying tax for your online purchases, you may soon find it when you checkout. To demonstrate how disorganized Congress and the States are, Sen. Durban’s Illinois is not yet part of the Streamlined Sales Tax Agreement.