Marketplace Un-Fairness Act?

This Summer, MFA, the "Marketplace Fairness Act" was passed by U.S. policymakers amid a combined 69-27 bipartisan vote. The Marketplace Fairness Act gives states the opportunity to enact laws which force retailers to take a sales tax for their home state, even if the purchaser does not live in the state in question and has no legal connection to it. For example, if a boutique store in Washington sells jeans to a person who lives in Arizona, the merchant would collect Washington tax on the purchase and take it for Washington.The case Quill Corp. v. North Dakota ('92) is mainly responsible for The MFA. In the case, the U.S. Supreme Court prohibited North Dakota from forcing a sales tax on sales to North Dakota residents by a strictly out-of-state seller. The Supreme Court went on to urge Legislative officials to respond to the matter with new legislation; The MFA is the Senate's (belated) acceptance of the court's invitation.The meaning of the bill is twofold: Firstly, under their current legislation, states don't earn the income that they absolutely need. Under current legislation of most states, if purchasers are not charged sales tax on a purchase, they are required to concede a use tax to their state of residence. Due to the lack of enforcement, it's not surprising that many buyers do not perform this legal obligation when they buy an item from an online, out-of-state retailer; MFA seeks to address this issue by asking retailers to aid in the tax collection process.Second, the new piece of legislation wants to balance the obvious advantage that online retailers with no presence in a state have over brick-and-mortar retailers. If buyers acquire a good for 1 dollar at a shop, the seller will charge the current states tax (maybe 5 percent), creating a total of $1.05. On the other hand, if he/she purchases that exact item for the same price from an e-commerce business with absolutely no connection with the state, and does not self-report the particular state tax, he or she has basically purchased the good at a lower price. Brick-and-mortar stores (understandably) think that this puts them at a serious disadvantage, particularly in consideration of the fact that they typically provide more tax revenue, employment and capital investment for the state than online, out-of-state stores.Small retailers and Ecommerce businesses are strongly opposed the legislation. Although The Marketplace Fairness Act requires the assignment of free software to businesses in order to help them collect the proposed sales taxes, the majority of small companies disagree that such software will be compatible with their current ordering systems. Not to mention, even though MFA won't apply to companies that generate less than one million annually, lots of small companies with modest profits may find themselves getting hit with compliance costs that are much greater than the tax revenue generated by their collections. Perhaps most importantly, the bill's opponents emphasize that a small business which ships to 30 states could be subject to an expensive and cumbersome sales tax audit in each of those 30 states.Although The MFA will ultimately make states simplify their taxing tendencies, it does not explicitly ease the apprehensions that many sellers have about suffering from more than one state sales tax audit. Furthermore, there are several trade groups, such as the American Society of Pension Professionals and Actuaries, who have indicated that the broad language of the bill essentially authorizes states to apply tax many purchases not currently addressed in the current draft of The MFA - even employee contributions to retirement and 401(k) plans could be affected.