By Lindsay Wise, McClatchy Newspapers, April 23, 2013

[....] The Senate is expected to vote this week on the Marketplace Fairness Act, which would give states the authority to collect sales taxes for online purchases. Current laws allow states to collect taxes only from retailers with physical presences in their states, resulting in the loss of a projected $23 billion in sales tax revenue nationwide for 2012, according to a 2009 University of Tennessee study.

In addition to closing the tax loophole for e-commerce, the bill would affect non-electronic transactions across state lines, such as catalog sales.

Retailers would use software programs to charge the appropriate state and local sales taxes based on customers’ billing addresses.

Businesses that make less than $1 million in annual out-of-state sales would be exempt, and residents of states that have no sales taxes wouldn’t have to pay unless their states decided to opt in [....]

Bieron acknowledged that software programs make it easier for retailers to calculate taxes but he said that was only the first step in a complex bureaucratic process.

“The idea that there’s a technology solution that’s perfect . . . that’s like a fairy tale world,” he said. “It’s when the small business gets a demand letter or audit notice or a letter saying you have to appear in tax court 3,000 miles away – that’s the problem, and there’s no app for that.”

Bieron said eBay wanted lawmakers to increase the small business threshold either to $10 million in annual out-of-state sales or to 50 employees. “We think that’s a much more realistic dividing line,” he said. [....]