Simpler, fairer

Gazette Editorial Board

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The Marketplace Fairness Act has been assailed as a tax increase. But it's actually an effort to stop tax evasion and create a level playing field for online firms and traditional retailers. Congress should make it law.

The fairness act creates no new taxes. It increases no taxes. Basically, the act permits states to require online retailers to collect existing state and local sales taxes from their customers residing in the state. So an Iowan who buys an item online would be charged Iowa state sales tax, as well as local-option taxes. In many cases, that doesn't happen now. Iowans are supposed to remit those taxes to the state anyway, but very few do.

Brick-and-mortar businesses follow the law, and it's unfair to allow online retailers to play by a different set of rules.

Under the act, states that want to collect those taxes must first take steps to simplify their sales tax regulations, which could go a long way toward untangling cumbersome, outdated rules.

Small businesses with sales of less than $1 million would be exempt from the act's requirements.

Leaders in Iowa and other states have been talking for years about tackling the online sales tax issue. We think federal intervention now is appropriate, and the fairness act is the right step.

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