Main Street Fairness Act

The Main Street Fairness Act, formally known as H.R. 5660, is a bill before the United States Congress which would "promote simplification and fairness in the administration and collection of sales and use taxes, and for other purposes." Proponents say that it will create billions of dollars in sales tax revenue to local communities without raising taxes or creating a new tax. Specifically, the Main Street Fairness Act would allow state governments to require large out-of-state retailers to collect and remit sales tax on purchases shipped to those residents of those states. The Main Street Fairness Act was introduced by William Delahunt, a Democrat from Massachusetts, on June 30, 2010. As of October 2011 it has not passed the House or the Senate.

Current law

Under current state laws, consumers are generally responsible for paying the sales tax due on their online purchases. Due to problems with compliance, some states have considered laws which would compel online retailers to report consumers' purchases to state tax collectors. Some consumer advocacy groups believe such reporting requirements violates consumer privacy. By shifting the remittance duty of sales tax from consumers to retailers, the Main Street Fairness Act would make it unnecessary for retailers to report customers' purchases to the state.

National Bellas Hess

Main article: National Bellas Hess v. Illinois

In National Bellas Hess, Inc. v. Department of Revenue of Illinois, 386 US 753 (1967), it was held that a business whose only contacts with the taxing state are by mail or by common carrier lacks the "substantial nexus" required under the Dormant Commerce Clause.

Quill case

Main article: Quill Corp. v. North Dakota

In Quill Corps. v. North Dakota the Supreme Court ruled that a business must have a physical presence in a state for that state to require it to collect sales taxes.

Arguments

Supporters of the Main Street Fairness Act say it will benefit state and local governments by increasing tax revenue and protect local businesses from unfair competition that exploits what they see as a tax loophole.

See also

• Alliance for Main Street Fairness
• Sales taxes in the United States
• Amazon tax

External links

• Main Street Fairness Act at OpenCongress