FindLaw columnist Eric Sinrod writes regularly in this section on legal developments surrounding technology and the Internet.

Last week, by virtue of a 63-30 procedural vote, the Senate moved forward with a bill called the Marketplace Fairness Act, with a final Senate vote set for May 6, according to The Wall Street Journal.

The bill, if it were to become law, would enable states to force online sellers nationally to collect sales tax with respect to their residents’ purchases.

However, according to the Journal, this has changed. Large online sellers now have tremendous physical operations nationally with warehouses and other facilities, while more traditional sellers have moved more and more online. Accordingly, the tax advantage for online sellers has “eroded.”

The Act, if it were to become law, in essence would supersede much earlier Supreme Court precedent, which held that a particular state could not require an online seller to collect sales taxes unless that seller had a true physical presence in that state.

This legislation is worth following.

Eric Sinrod is a partner in the San Francisco office of Duane Morris LLP, where he focuses on litigation matters of various types, including information technology and intellectual property disputes. You can read his professional biography here. To receive a weekly email link to Mr. Sinrod’s columns, please email him at ejsinrod@duanemorris.com with Subscribe in the Subject line. This column is prepared and published for informational purposes only and should not be construed as legal advice. The views expressed in this column are those of the author and do not necessarily reflect the views of the author’s law firm or its individual partners.

Related Resources:

  • S.336 - Marketplace Fairness Act of 2013 (Congress.gov)
  • What the Internet Sales Tax Means for Small Biz (FindLaw’s Free Enterprise)
  • San Francisco’s Prop E Passes, Will Pay Off for Startups (FindLaw’s Technologist)
  • State Sales Taxes For Online Sales? (FindLaw’s Technologist)

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