The Main Street Fairness Act filed by U.S. Sen. Dick Durbin, D-Ill., will correct these problems. It builds on the Streamlined Sales Tax Agreement, that now includes 24 states with uniform definitions of what's taxable, along with a single-point sales-tax remission system, and a simplified sales-tax code.
Through this agreement, these 24 states – and others that join in – are relieving the undue burden on interstate commerce which may have existed in the past.
The act provides that if a state adopts the Streamlined Sales Tax Agreement and helps build this national uniformity, the state may then require remote retailers to collect and remit the sales tax.
To help make it work, the Streamlined Sales Tax Governing Board has software to collect the tax for the online retailer and remit it to the state at no charge to the remote retailer. It insures that there are no extra costs to the online retailer for collecting the sales tax.
Obviously, more tax revenues will be collected by the states, since there has been tax avoidance under the current system. How those funds are used is up to the states. In Indiana, we hope to use the extra revenue to eliminate an outdated and unfair inheritance tax.
Most important is the need to establish equity for all retailers and to update the sales tax system so it is shared fairly by digital age consumers.
Luke Kenley is the Republican chairman of the Indiana Senate Committee on Appropriations and president of the Streamlined Sales Tax Governing Board, a coalition of 24 states that have agreed to simplify their sales tax systems.