Senator Jack Reed and Governor Lincoln Chafee are urging Congress to pass the Marketplace Fairness Act. The bill would require online merchants to pay state sales taxes. Chafee and Reed say it’s a matter of fairness.
Reed and Chafee stood side by side in a West Warwick furniture store to urge Congress to allow a vote on the Marketplace Fairness Act. Chafee said the bill – which would require online merchants to pay state sales taxes – would add $70 million a year to the state treasury.
"This is all very, very important for every state across the country to level the playing field," Chafee said. "And I can say here in Rhode Island when it passes our sales tax will go from 7% to 6.5%. That’s an agreement. If we can get this revenue coming in as a result of this passes we’re going to lower the sales tax. We’re not going to go off and spend that windfall."
Chafee, Reed and several merchants attending the press conference said it is increasingly common for customers to go to a bricks and mortar store to check out the merchandise and then buy it online to avoid paying the sales tax.
Online merchants – led by EBay are mobilizing to oppose the bill. They say it would impose an unfair burden on small businesses and hamper growth of online sales.