At a Senate Finance Committee hearing today, U.S. Senator Ben Cardin (D-MD), a member of the Senate Finance Committee, highlighted the importance of legislation that would level the playing field for local businesses and give Maryland and other states the option to collect sales tax already owed under current law from out-of-state businesses. Senator Cardin noted that the $375 million in revenue that would be captured by Maryland through improved sales tax compliance would make up the budget shortfall currently faced in Annapolis, avoiding the need for a Special Session of the legislature.
“Our tax system should be fair for all businesses. Maryland retailers aren’t looking for special treatment but simply a fair way to compete against large Internet sellers who charge similar prices but get away without collecting sales tax,” said Senator Cardin. “The Marketplace Fairness Act treats every business the same and would not require a single penny in additional taxes to be paid that is not already owed to each state.”
The Marketplace Fairness Act (S. 1832), co-sponsored by Senator Cardin, would close a current tax loophole that requires brick-and-mortar retailers to collect sales taxes from customers who make purchases in their stores, but allows many online and catalog retailers to avoid collecting the same taxes since, under current law, residents are expected to remit the sales taxes directly to the state. If enacted, the new law would give states the option to collect sales and use-tax revenues from out-of-state sellers through a new, simplified tax system.