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House Judiciary Eyeing Online Sales Tax Legislation

Parity in state sales tax collection at issue

Small business owners are urging a House committee chairman to act on online sales tax legislation.

House Judiciary Chairman Virginia Republican Rep. Bob Goodlatte plans to hold a hearing on legislation to make it easier for states to collect sales tax from online retailers tomorrow, reports The Hill.

The idea is to create state sales tax parity between brick and mortar and online retailers; we reported the Senate passed similar legislation in 2013.

Now, online retailers need only pay state sales tax if they have a physical location in that state.

The imbalance allows online retailers to charge less for the same products that brick and mortar retailers sell, according to bill proponents like small businesses. Opponents, like eBay, say such legislation will raise operating costs for smaller businesses.

Radio equipment suppliers, too, are impacted by the issue. Those that sell through a catalog or online must collect sales tax from customers when the seller has a direct or indirect physical presence in a state, like a sales office, manufacturing facility or distribution center.