By: Brittany Paris
When you shop online, you usually aren't charged sales tax. How much is that hurting Nebraska?
It's estimated the state is losing up to $50 million a year on people not paying online sales taxes.
The Marketplace Fairness Act could change the way you shop online. It would require online businesses with more than $1 million in annual sales to collect sales tax.
The money would then be distributed to the individual state and city.
"This is going to help the state," supporter of the act, Tom Wright of Wright's Jewelers, said.
Two bills allocating where that tax money goes in Nebraska were heard in a revenue committee meeting on Friday.
One proposes the online sales tax revenue be used to decrease income tax rates. The other would direct the first year of sales tax on Internet transactions to the Property Tax Credit Cash Fund.
Supporters say because of these bills, Marketplace Fairness would decrease taxes in Nebraska.
"Any dollars that come in extra from Marketplace Fairness would go to tax reduction," Jim Otto, President of the Nebraska Retail Federation, said in the hearing.
"Identifying the use of such money, when it happens, will be of great help to our reps in Washington to be able to look at it and say the state has a reason for us to collect this uncollectable tax," Wright said.
But some big businesses are holding out hope the Marketplace Fairness Act doesn't pass.
Websites like eBay, StubHub and Amazon support an Internet sales tax exemption. They say for consumers, the act would mean more money out of their pockets.
And they say small businesses would be required to collect sales taxes nationwide, which would be an unnecessary burden.
Supporters in Nebraska, including local business owners, say that extra money is already owed. It's just that most people don't pay it or claim it on their taxes like they're supposed to.
The U.S. Senate overwhelmingly passed the Marketplace Fairness Act last year. Both Senators Fischer and Johanns voted in favor. The House is expected to vote later this year.