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"The Marketplace Fairness Act, being called the \"Internet Sales Tax,\" is expected to come up for a Senate vote Monday. What does the bill actually say, what are the odds it will become law, who loves it and who hates it? We're glad you asked.\n1. What Would the Marketplace Fairness Act (MFA) Do?\nThe MFA would require online retailers to collect sales tax from customers in states where the retailer has no substantial physical presence and remit them to each customer's state. \nThere are two important caveats: First, there's a small business exemption for online sellers making less than $1 million annually. Second, it only applies to purchases made by customers in states where sales tax is already collected. \n2. Why Does the Marketplace Fairness Act Exist?\nThanks to a 1992 Supreme Court ruling \u2014 Quill Corp. v. North Dakota \u2014 Internet retailers do not collect sales tax from customers where the retailer has no major physical operation. Instead, Internet retailers' customers in states with sales tax are supposed to report their online purchases in their tax filings. Few do, causing states to lose an estimated $11 billion every year.\nSeveral states have been experimenting with laws to close that loophole for years. That has created a confusing patchwork of laws with questionable constitutionality. As a federal law, the MFA would trump the various state laws and settle the issue once and for all, provided it wasn't challenged in court.\nThe MFA's supporters also argue it would help brick-and-mortar shops compete with online retailers \u2014 a struggle that has become increasingly difficult with the rise of \"showrooming.\" \n\"The bill was introduced basically to put all businesses on a level playing field,\" said Daniel Patrick Head, Press Secretary for Sen. Michael B. Enzi (R-Wyo.), who introduced the Senate version of the MFA. \"Right now, out-of-state online catalog retailers are operating and they're selling within different states, but they're not having to follow the same laws as other businesses and that . . .is collecting the sales tax on purchases.\"\n3. How do my favorite Internet companies feel about the Marketplace Fairness Act?\nThe battle lines of the business world are being drawn between Internet titans Amazon and eBay. Amazon is in favor of the bill, while eBay is fighting for major changes.\nAmazon's support for an Internet Sales Tax might seem at first contradictory: Why would Amazon want to be taxed? However, it makes good business sense: Amazon has been expanding into new states to support its new same-day delivery service, and thus has to pay sales tax in several new states anyway. \nMany commentators argue Amazon is calculating that it's wealthy enough to deal with the costs of complying with the MFA, but its smaller competitors might find doing so more troublesome. Amazon spokesman Ty Rogers, however, told Mashable Amazon has supported MFA-style legislation for a decade and pointed to Amazon's recent Congressional testimony on the issue for more on the company's position. \nEBay isn't strictly opposed to the notion of an Internet Sales Tax. Rather, eBay wants the small business exemption expanded to cover online business selling less than $10 million annually and employing less than 50 people.\n\"We're taking a position against the bill consistent with honestly our position on Internet Sales Tax legislation for years \u2014 the issue's been around for well over a decade,\" said Brian Bieron, senior director of global public policy at eBay. \"And our position has always been, pretty simply put, that we don't think a change in the tax law regarding sales tax collection by the states should harm small businesses that use the Internet.\"\nBieron said eBay modeled those figures on recommendations from the Treasury Department's Office of Tax Analysis and legislative precedents set by the Affordable Care Act and the Family Medical Leave Act. \nWhen asked how many eBay users sold more than $1 million annually and would thus be affected by the MFA as written, Bieron dodged the question by saying eBay didn't know how much money its users sold using other platforms and therefore the figure \"doesn't answer the question as to how many people would be affected by this bill.\"\n4. What Are the Odds the Marketplace Fairness Act Will Become Law?\nCongressional support for the MFA isn't dividing neatly along party lines, and it's especially divisive among Republicans. Some Republicans want it to bring fairness to the marketplace, while others view it as an unwanted complex regulatory burden on businesses. \nIndeed, the majority of the MFA's costs would be placed on businesses at the benefit of the states, according to Dan Effron, a Tax Partner at Marcum LLP well versed in the issue.\n\"There really is no additional burden on the states, because again, the burden \u2014 as it always has been with the collecting and remitting of sales tax \u2014 really falls on the company,\" said Effron. \"Every state in the union that imposes a sales tax, believe me, is already set up to register companies and collect the money.\"\nOverall, the MFA is expected to find success in the Democratic-controlled Senate, but the GOP divide will likely make things more interesting in the Republican-controlled House. Chairman of the House Judiciary Committee Rep. Bob Goodlatte (R-Va.) controls the MFA's fate in the House, and he sounds less than enthusiastic about the bill. The bill's House sponsor, Rep. Steve Womack (R-Ark.), is working with Goodlatte's staff to \"discuss [Goodlatte's] concerns\" with the MFA, Womack said in a statement.\nThe Obama administration supports the MFA, so the president would likely sign the bill if it reaches his desk.\nWhat other questions do you have about the Marketplace Fairness Act? Share in the comments below, and we'll do our best to answer.\nImage via Philippe Merle/AFP/Getty Images"^^<http://www.w3.org/2001/XMLSchema#string>
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