The Marketplace Equity Act would improve the states’ rights to enforce the collection of state sales and use tax laws and for other purposes. It is currently pending before the United State House Committee on the Judiciary. The bill, if approved, would end the current prohibition on states from collecting sales tax on out-of-state businesses. This went into effect due to a 1992 Supreme Court ruling. Small sellers or retailers must charge and collect sales taxes on many items for sales. Prohibition from states on collecting sales taxes from remote sellers, it is believed, creates an unfair price disadvantage for many businesses in retail, this according to the AVMA.
Because of the 1992 act, retailers that gross under $1 million in the United States or $100,000 in a particular state or larger amount as determined by the state, would be exempt from this ruling.
Dr. Ron DeHaven, chief executive officer of AVMA, said, “As Congress seeks solutions to address the federal budget, passing the Marketplace Equity Act will help states facing their own budget shortfalls without increasing the federal deficit. Congress has an opportunity to enhance states’ rights over sales tax collection authority and, in the process, close a loophole that will level the playing field for our nation’s small businesses, including veterinary clinics.”
The AVMA believes in sales tax fairness for small business and allowing states the authority to manage state sales tax laws. Learn more about the AVMA and its congressional activities by visiting www.avma.org/advocacy.