Online sellers set to face higher taxes to level retail playing field

ONLINE retailers such as Amazon and eBay are facing much higher taxes after the US Senate passed the controversial Marketplace Fairness Act last night.

The Act, which still needs to go through the Republican-controlled House of Representatives, will see sales taxes applied based on what state the buyer is in, rather than the seller.

The proposals are designed to level the playing field between online and bricks and mortar retailers, closing a gap that allows internet firms to sell at around five to 10 per cent cheaper.

Although the Act exempts most smaller retailers, since it only applies to those with sales of more than $1m (£644m), it has been heavily criticised by eBay, which claims that it will tie up aspirational sellers in needless red tape.