Seth Berry Introduces E-Fairness Bill
House Majority Leader Seth Berry (D-Bowdoinham) has presented his small business tax fairness bill to the Taxation Committee.
The bill takes a two-pronged approach to level the playing field between bricks-and-mortar businesses and online retailers. Under current laws, Maine can only require sales tax collection from businesses with a substantial physical presence in the state.
“This leaves bricks-and-mortar retailers — the same Main Street businesses who sponsor our Little League teams, employ our neighbors, and pay income and property taxes here in Maine — at a real disadvantage,” Berry said in his testimony.
Maine loses out on $19 million to $24 million in uncollected Internet sales tax annually, according to a study commissioned by the Maine State Chamber of Commerce and the Retail Association of Maine. The two organizations support Berry’s bill.
The first part of Berry’s bill would implement an e-fairness law to close a loophole that allows large online retailers that use affiliates to avoid paying sales tax.
The second part of Berry’s bill aims to facilitate tax collection from multistate retailers by simplifying Maine’s sales tax laws and aligning them with those of other states. The bill directs the Department of Administrative and Financial Services and the Bureau of Revenue Services to determine what changes would be necessary to align Maine laws with the national Streamlined Sales and Use Tax Agreement, or SSUTA, and report proposed legislation to the Taxation Committee by Jan. 15, 2014.
Implementation of streamlining under SSUTA guidelines, either fully or in a scaled-back manner, is a condition for states that want the authority to collect state and local sales taxes from all large Internet and mail-order retailers under the proposed federal Marketplace Fairness Act. The federal proposal is now under consideration in Congress and has the support of Gov. Paul LePage, Maine’s congressional delegation, the National Governors Association and the National Council of State Legislatures.
Rep. Adam Goode, House chair of the Taxation Committee, said it’s important that Maine moves forward with both parts of Berry’s legislation. He said the conversation about streamlining will be bipartisan and will closely involve the business community.
“The economy is changing. People are buying in different ways. We don’t want Maine’s bricks-and-mortar stores to be left in the dust,” said Good, D-Bangor.
Berry noted that streamlining of the sales tax can take place incrementally, with each part eliminating red tape for multistate retailers.