On Friday July 29th, Senator Dick Durbin (D IL) introduced the “Main Street Fairness Act” which allows for a standardized method for states to collect sales tax for online retailers. I completely disagree with the majority of rhetoric surrounding this issue, including the dialog coming out of Durbin’s office, but I do support this legislation. Others in the internet marketing industry should to.

Here’s what the bill proposes in short:

• No new taxes.
• Applied only to taxes already imposed by the states that are not being collected.
• Provide states with the clear authority to require retailers to collect sales taxes already owed.*
• Treat all retailers equally regarding sales tax collection.
• Release consumers, currently expected to calculate and send in the taxes themselves.
• Exemption for small online retailers.

We need to look past the rhetoric in the dialog and focus on the bigger picture. For example framing this issue as leveling the playing field for offline retailers is ridiculous. Shipping and handling cost often times outweigh sales tax. So to assume that retailers are choosing e-commerce to avoid a sales tax is not grounded. Consumers are using e-commerce more and more for many different reasons. Some are shopping more online because the internet has mastered the “long tail” approach. Some are shopping online because online retailers can offer a completely customized shopping experience. Many are shopping online because they are just lazy.

But like I said we need to look past the rhetoric and move past this issue so that more business owners have the opportunity to succeed online. The only way we are going to do that is a federal solution that lays a ground work for how online retailers collect taxes across the country.

I also think that this legislation will put to rest the debate in the affiliate marketing space. With this type of legislation we wouldn’t see Amazon or other large affiliate programs pulling out of states to avoid sales tax.

Ebay is coming out against this bill citing that it would harm small online retailers. I am concerned with that as well. I would be interested in an amendment that take’s the concerns of small business into account.

*I am not a big fan of this provision. I mean that could be like a decade of taxes for some companies. I am willing to bet it was thrown in to appease a state supporter, but Durbin is willing to use it as a bargaining chip if he needs to.