Senate Budget Chairman Michael Enzi is expected to soon reintroduce the Marketplace Fairness Act, which would give states the authority to require online and other remote retailers to collect sales taxes in exchange for states simplifying their sales tax systems. The Senate had previously passed the legislation in May 2013, but the measure stalled in the House, where GOP leaders are opposed to the legislation. In the new Congress, a path to passing the online sales tax legislation has remained unclear.
Advocates for the measure were encouraged last week, when U.S. Supreme Court Justice Anthony Kennedy wrote that given the rise of online purchasing, it is time to reassess the court’s position that states can only require companies physically located within their borders to collect sales taxes. Justice Kennedy says that this position, which was last upheld in the 1992 case Quill Corporation vs. North Dakota, “now harms states to a degree far greater than could have been anticipated earlier.” The remarks were made in connection to the court’s ruling in a Colorado online commerce case.
