The U.S. Senate passed a bill on Monday night (May 6), which hopes to collect state sales taxes from online purchases.
According to USA Today, the final prospects of the bill are uncertain, as it heads to the House for approval.
The act would overturn decades-long precedent and leave many small online sellers with the task of figuring out how to manage collecting and remitting sales tax to nearly every state.
In the past, specifically 1992, a Supreme Court case ruled that states could only require businesses to collect sales tax if the business had a physical presence in the state, such as a store or warehouse. Out-of-state retailers — mostly catalogs back then — did not have to collect sales tax because it was deemed too difficult for them to abide by so many different tax jurisdictions and rules.
However, with online shopping being a $226 billion-a-year business and software existing that makes it easier to collection online sales tax across states, some feel the change is long overdue.
The act would also require states to simplify their tax codes and provide retailers the software to assist in tax collection at no charge.
Read more about the bill over at USAToday.com.