Advantages and disadvantages of Market Fairness Act in brief- pros and cons

Learn in brief all about the Market Fairness Act. Know who will be benefitted by this US legislation and who will be in loss. Learn what you have to gain or lose if you have a market in US and how this bill will affect you.

For those of you not aware of this act let me give you a little introduction about this act. Basically, the Market Fairness Act has been brought in to make the playing field level between the online and offline retailers, better known as brick and mortar shops. The playing field is the tax exception that online marketers enjoy due to a landmark court hearing in U.S. which ruled that states cannot tax businesses that don't have a physical presence in the state. This makes the products of online retailers comparatively cheaper as compared to that of physical shop owners.

The Act aims to bring in an option tax mechanism wherein every state would have the right to tax for the sales that are done in that state. There is both support and opposition for this bill which we are discussing below:

Advantages: The advantage would be to the brick and mortar shops which have been facing reducing profits due to the unfair competition from the online stores due to the tax margin. Many people are now in the habit of coming to the shops and then comparing the prices from those available from online stores. So while people are still thronging to the markets but the sales have reduced.
It is actually the Brick and Mortar shops lobby which has been pressing their representatives for some time now to introduce this legislation.

Disadvantages: The disadvantage is in from on non-uniform of tax methods which will rise due to the freedom this legislation gives to each state. The online retailers would have to deal with more complex tax laws due to the varied tax laws of each state which would increase their work as online retailers would have to employ people to deal with all the tax rules and regulations.

It is not that the online retailers are averse to paying up extra taxes, what they are worried about the complexity it would bring for them. The biggest problem would be for the small online retailers who can't employ so much resource just to deal with the varied tax policies.

Present scenario: The bill has successfully passed through the Senate with a high majority. This was done without bringing the bill in front of a review committee as it was sure that the committee would bring some changes in it. However, the hope for online retailers is not still extinguished as the legislation now has to go through the House of Representatives which are quite adamant to let the bill go through the House Judiciary Committee which is sure to change the text of the bill. The Chairman of the committee Robert Goodlatte is a representative of Virginia who is a supporter of increases in taxes but recently communicated in an email to The Roanake Star that he would like to bring some changes in the text of the bill as he is not in support of making the tax laws more complex which this bill would no doubt do.

Whether you are affected positively or negatively by this bill, you should be ready to face some sort of tax laws for doing online based business in US. Even if the bill is not passed in its present state, but it is quite sure to come out as a legislation and will definitely reduce the profit margins for online retailers.

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