In early May, the Senate passed the Marketplace Fairness Act by a wide margin. This bill would give states the authority to force online retailers to collect sales tax. According to the terms of the legislation, online retailers with sales that exceed $1 million annually could be required by states or local governments to collect and distribute sales tax to the locations where the purchases originate. This bill represents the culmination of long-fought efforts by brick-and-mortar businesses to even the playing field with online retailers who are often not required to collect sales tax in the same way local businesses are.
Since the bill’s passage in the Senate and subsequent move to the House for consideration there, contributions from national retailers’ PACs have shown a sharp increase. Inc. Magazine recently reported on this spike in contributions. In an effort to gain support for the passage of the bill, Home Depot’s PAC donated $296,500 to various election campaigns and leaderships in June. Considering Home Depot’s PAC donations in the 2012 election cycle was only $77,500, this represents a sharp increase. Target, WalMart, JC Penny, Lowes, and others have all made contributions to influential House members since the bill passed the Senate.
The Marketplace Fairness Act does not enjoy universal support from large corporations. Ebay’s CEO John Donahoe has expressed his opposition to the bill – “The solution is simple: if Congress passes online sales tax legislation, we believe small businesses with less than 50 employees or less than $10 million in annual out-of-state sales should be exempt.” eBay’s PAC contributed $54,000 in June to Congress members.
As the Marketplace Fairness Act gets closer to a vote in the House, corporations opposing and supporting the passage of this bill will likely continue to keep their donations coming. The eventual passage or defeat of this bill could have significant impacts for local business owners and online retailers.