Honors Theses

Date of Award

2014

Document Type

Undergraduate Thesis

Department

Public Policy Leadership

First Advisor

Eric Weber

Relational Format

Dissertation/Thesis

Abstract

The physical presence standard for remote sales tax collection, established in 1967, remains the standard for sales tax collection today. Advances in technology have led to increases in online shopping. Online retailers act under the physical presence standard. Throughout the United States, many individual states are facing economic challenges either as a result of or in conjunction with states' inability to collect sales tax from some online vendors without a physical presence in the state. The challenges include loss of revenue due to uncollected online sales tax and lack of fairness for brick-and-mortar retailers that do remit sales tax to the state and for less affluent citizens unable to shop online. In order to combat these challenges, some states are redefining and expanding the meaning of physical presence in what are known as state Amazon laws. New York and Georgia took this approach. At the federal level, the U.S. Senate's 2013 Marketplace Fairness Act attempted to enable states to collect online sales tax through origin sourcing, which does not redefine the physical presence standard. The U.S. House Judiciary Committee is currently working on alternatives to the Marketplace Fairness Act that accomplish the same goal of allowing states to collect remote sales tax without expanding the physical presence standard. In this study, I chose to examine the Marketplace Fairness Act and New York and Georgia's state Amazon laws in order to make a policy recommendation for Mississippi. I argue that Mississippi should implement a state online sales tax policy similar to New York and Georgia, while continuing to push for federal legislation like the Marketplace Fairness Act.

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