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Proposed Bill Would Allow State To Collect Taxes On Every Internet Purchase

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BALTIMORE (WJZ) — Millions of dollars in online sales go untaxed every year in Maryland. Now the state wants Internet retailers to collect the taxes from online customers.

Gigi Barnett explains area stores are joining in on the fight.

Finding the perfect Mother’s Day gift can start just about anywhere. But at a brick and mortar store like Nelson Coleman in Towson, a 6 percent sales tax is added at checkout.

Shoppers can skip that fee on some websites, because e-tailers aren’t collecting it.

“Even though they should collect the 6 percent sales tax, they don’t,” said Comptroller Peter Franchot.

State Comptroller Peter Franchot says that’s not fair. So he’s backing a bill in Congress called the Marketplace Fairness Act 2013.

It would allow states to collect taxes on every Internet purchase.

“Years ago, they put this exemption in for the out-of-state Internet companies because they were like babies. They were like little fledgling birds,” said Franchot.

But the state says the exemptions have gone on long enough.

“Now, they’re like 747 behemoths. They are huge,” he said.

The state loses about $173 million every year from online sales that go untaxed. And brick and mortar stores like Nelson Coleman say online retailers should pay up.

“No one’s trying to exclude e-tailers in any way. We’re just trying to level the playing field,” said Chris Coleman, Nelson Coleman Jewelers.

While there is much opposition to the bill, not every online retailer is against it. Amazon recently backed the legislation.

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