Martha Stewart: Let Each State Determine Its Own Online Sales Tax System

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Business owner and television personality Martha Stewart told PJ Media that each state should determine its own online sales tax system.

Stewart was asked if she agrees with the Marketplace Fairness Act being considered in Congress, which would require Internet retailers to collect and remit sales taxes based on where the shopper lives.

For example, an online business located in Delaware, which has no sales tax, would be required to send sales tax to governments that impose such taxes if they make more than $1 million annually. However, retail stores in Delaware could continue to allow customers living in other states to shop tax-free.

Currently, states are only able to require Internet stores to collect sales taxes if they have a “physical presence in the state.” Therefore, many online transactions are tax-free.

“I don’t have really an opinion on that. I think each state has a sales tax and the state’s legislation has to determine what’s right and what’s wrong for that particular state and if there’s tax, there’s tax,” Stewart said of the bill.

Senate Majority Leader Harry Reid (D-Nev.) said on Tuesday that Internet sales tax is not a “meaningful” issue to Americans.

“The Marketplace Fairness Act, we have 50 senators, Democratic senators that voted for it and more than a majority of the Republicans. It affects three states — actually four, but Delaware is all in favor of our doing this. And they’re trying to protect their interests at home. But there’s — doesn’t cost the states a penny. Nothing. Zero,” said Reid on Tuesday at the Capitol.

“So it’s not — it’s not an issue that is meaningful. And the House, I’m told that the jurisdiction of that legislation is in the Judiciary Committee. Over here there was a hearing held by the Commerce Committee. There is no blue slip problem. So I think we’re in good shape on this bill.”

Web retailers like Amazon support the legislation while eBay opposes the bill.

“If Congress passes online sales tax legislation, we believe small businesses with less than 50 employees or less than $10 million in annual out-of-state sales should be exempt from the burden of collecting sales taxes nationwide,” said John Donahoe, president of eBay. “To put that in perspective, Amazon does more than $10 million of sales every 90 minutes.”