Internet Sales Tax Bill Opposition
The Internet sales tax bill was approved on Monday with bipartisan support in
the Senate with a 69 to 27 vote as the bill faces opposition in the House, where
some lawmakers regard it as a tax increase. According to government estimates,
in 2012 Internet sales in the U.S. totaled $226 billion, up nearly 16% from
2011. The law would require out-of-state retailers to collect sales taxes from
Internet purchases from retailers such as Amazon and eBay, radio and TV ads
then, send that tax to the state where the shopper resides. If the law is passed
by the House, states must provide free computer software to help retailers
calculate sales taxes, based on where shoppers live. States must also establish
a single entity to receive Internet sales tax revenue, so retailers don’t have
to send collected tax to individual counties or cities. The bill is to level the
playing field and to assist cash strapped states. Current sales tax law only
require retailers such as Best Buy, Target and Wal-Mart to collect sales taxes
if the merchant has a physical presence - office or distribution center - in the
state. Along with lawmakers from states with no sales tax as well as several
prominent anti-tax groups, eBay is leading the fight against the bill. Opponents
of the bill indicate it would put an expensive obligation on small businesses
because they are not as equipped as national merchandisers to collect and remit
sales taxes at the multitude of state rates. Businesses with less than $1
million in online sales would be exempt however, eBay wants to exempt businesses
with up to $10 million in sales or fewer than 50 employees.
The Federal Reserve reported Tuesday that U.S. consumers increased their debt
during March by a seasonally adjusted $8.0 billion, for the smallest increase
since July 2012. During March, monthly debt rose at a 3.4% annual rate, led by
the non-revolving category of debt, such as auto loans, personal loans and
student loans, which jumped $9.7 billion or at a 6.0% rate. Credit-card debt
fell by $1.7 billion or a 2.4% rate for the biggest percentage decline since
CoreLogic reported Tuesday that U.S. home prices climbed 1.9% during March,
marking the 13th straight monthly rise and a 10.5% year-on-year gain. When
excluding distressed sales, the monthly gain was 2.4%. Nevada saw a 22.2%
year-on-year gain. California saw a 17.2% gain. Delaware, Alabama, Illinois and
Virginia each saw year-on-year depreciation. CoreLogic's pending home price
indicator points to a 1.3% monthly and 9.6% year-on-year gain for April.
The Securities and Exchange Commission announced panelists for a roundtable
scheduled for May 14 to consider reforms for the industry. Participants will
include real estate investment trust Martin Hughes president of Redwood Trust
Inc, Kermit Roosevelt professor at University of Pennsylvania Law School and Tom
Deutsch executive director at the American Securitization Forum, top officials
from Fimalac SA’s Fitch, McGraw-Hill Cos. Inc.'s Standard & Poor’s and Moody’s
Corp. The SEC, the nation's securities watchdog, is assembling a group of
mortgage investors, analysts and academics to help figure out what to do about
credit raters, bringing the agency one step closer to overhauling the industry
made famous for its Triple-A ratings of subprime mortgage securities issued
during the build-up to the financial crisis of 2008. The roundtable goal is to
find a way to eliminate a practice known as “ratings shopping,” in which an
investment bank hired by a corporation privately solicits preliminary ratings
from multiple rating agencies for a securitized product and then only pays for
and discloses the most favorable rating received. One of three panels led by the
SEC will consist of participants will consider having the SEC create a
government-mandated clearinghouse through which credit raters would be randomly
assigned to handle ratings of structured finance product such as mortgage
securities. Such an intermediary would be set up to dismantle the ratings
shopping environment that currently encompasses the industry. The second panel
will review ways to encourage unsolicited ratings from credit rating agencies,
as a means of providing checks on primary ratings. The third panel is set to
consider a wide variety of other models, including one where firms would
continue to pick their raters but the agency would be compensated through
transaction fees over the life of the security paid for by both the rater and
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May 7, 2013