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What’s in the Marketplace Fairness Act?

By: Joseph Bishop-Henchman

The Marketplace Fairness Act, currently under consideration by Congress, would give states the authority to collect sales taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. on Internet purchases by requiring collection by out-of-state retailers. In return, the Act requires states to take steps to simplify their sales taxA sales tax is levied on retail sales of goods and services and, ideally, should apply to all final consumption with few exemptions. Many governments exempt goods like groceries; base broadening, such as including groceries, could keep rates lower. A sales tax should exempt business-to-business transactions which, when taxed, cause tax pyramiding. systems. What does the bill require and what does the bill leave out?