A growing number of UK e-commerce traders selling to the US could be forced to collect sales taxes for the US government after congressmen redrafted proposals for new legislation to include small businesses.
The Marketplace Fairness Act passed through the Senate in May and is now heading for the House of Representatives. The act will sharpen existing tax laws by placing the onus for sales tax collection on sellers.
We have looked into the implications for UK internet retailers selling to US shoppers back in April and May.
The new bill initially included the possibility of an exemption for small firms - those selling less than $1 million either in or into the country. But new proposals put forward by two congressmen have suggested the exemption should be scrapped and replaced instead by a simpler system that would make it easier for firms to collect taxes for sales to the 9,600 state and local tax jurisdictions.
The 'basic principles' of the online, or remote, sales tax would include that: 'Governments should not stifle businesses by shifting onerous compliance requirements onto them; laws should be so simple and compliance so inexpensive and reliable as to render a small business exemption unnecessary,' according to an outline of proposals laid down by chairman Bob Goodlatte and chairman Spencer Bacchus.
Anti-tax lobbyists such as craft marketplace Etsy and online auction eBay had originally called for an exemption for small businesses - with some, including Etsy, saying the threshold should be annual sales of $10 million below which businesses would not be obliged to collect the tax.
But in an emailed statement to The Washington Post, eBay appeared to have undertaken a volte-face, saying it was 'very encouraged that the remote sales tax principles released today by Chairman Goodlatte address concerns that we have raised on behalf of our small business community.'
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