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Welch Backs Internet Sales Tax

Rep. Peter Welch is hopeful that Congress will pass a bill this summer that will allow individual states to impose their sales tax on items purchased on the Internet.

Welch says the plan will help strengthen downtown businesses and will raise new revenue for many states.

Right now, states are allowed to require businesses to collect the sales tax on purchases made on the Internet, if the retailer has a physical presence in the state.

Under this legislation, states could choose to impose their sales tax on sellers of all taxable items sold on the Internet.

"If we put that on the floor we would have a substantial number of Republicans and a substantial number of Democrats that would vote to pass it." - Rep. Peter Welch

Welch is a lead sponsor of the bill in the House. He says many states, including Vermont, already require consumers to estimate the total amount of their Internet purchases on their tax forms, and then pay the appropriate sales tax. However, it’s believed that few taxpayers actually pay the full amount.

“The Main Street Fairness Act is not a new tax, it’s just requiring that when the retailer is an Internet retailer like Amazon, if you buy a book on Amazon that retailer has to collect the sales tax,” said Welch. “In the same way that if you went down to your local book store that local brick and mortar retailer would have to collect the sales tax from you.”

Welch says many retailers report that a number of consumers come into their stores to examine certain products, and if they like them, they go home and order them on line to avoid paying the state sales tax. He says this is an unfair situation that needs to be fixed.

“Our bricks and mortar retailers, they’re incredibly important to our downtown communities our village centers. And anybody in retail [faces] stiff challenges, and they’re willing to meet them and they’re willing to compete with the Internet,” said Welch. “But they want to do it on a level playing field.”

In the next few weeks, the Senate is expected to consider the Main Street Tax Fairness bill. Welch thinks it has a good chance of passing if it reaches the House floor for a vote.

“If we put that on the floor we’d have a substantial number of Republicans and a substantial number of Democrats that would vote to pass it,” said Welch. “So we’ve got a shot.”

It’s estimated that Vermont could collect $15 million to $20 million in new tax revenue annually if this bill becomes law.

Bob Kinzel has been covering the Vermont Statehouse since 1981 — longer than any continuously serving member of the Legislature. With his wealth of institutional knowledge, he answers your questions on our series, "Ask Bob."
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