Morning Business Memo…
Consumers in many states may soon have to kiss goodbye to tax-free online shopping. By a large bi-partisan majority the Senate voted for an amendment to the budget bill, which would require all retailers to collect and report sales tax. The House has yet to vote on this. The Marketplace Fairness Act covers brick-and mortar stores and online sites. “It’s not a tax,” says David French of the National Retail Federation, who supports the amendment. “The era of digital commerce has created challenges for state sales tax laws.” Even Amazon backs the proposal, despite its long opposition to collecting sales taxes. One reason for Amazon’s change of heart is its decision to build more regional distribution centers to speed deliveries of its goods. Brick-and-mortar retailers have long argued that they are at a disadvantage, because they have to collect sales taxes while online competitors are exempt. Supporters of the Marketplace Fairness Act say it would level the playing field.
“Signals Weak for TV-Ad Market” reads a big headline in this morning’s Wall Street Journal. “Broadcast-television ratings have dropped sharply this season,” reports the Journal, and this may have a negative impact on the spring ad-sales market. The networks’ take from the upfront could be flat or slightly down on last year. More TV ad dollars are expected to migrate to cable channels. But both broadcast and cable are starting to face a broader challenge from online media.
Global markets have had a positive reaction to the latest deal to avoid a financial crisis in Europe. US stock futures rose this morning after a strong close for Wall Street on Friday. A new agreement means Cyprus gets a $13 billion bailout and avoids a banking collapse. But in return Cyprus must roll back its bloated and lightly regulated banking system, which has been a haven for Russian billionaires and others seeking to avoid taxes. Steep losses are imposed by this deal on depositors who have more than $128,000 in two large Cypriot banks. Because the banking sector accounts for about half of the economy, the bailout could lead to an outright depression on the island. Further weakness could force the need for another financial rescue for Cyprus in the future.
There are signs that agricultural subsidies in the US and Europe could be deal-killers for a new trade agreement. President Obama wants to win a breakthrough on what would be the world’s largest free trade deal. Japan is seeking US backing for its involvement in a trans-Pacific free trade partnership. But American car makers have long complained about Japan’s restrictions on imports.
Richard Davies Business Correspondent ABC News Radio abcnews.com Twitter: daviesabc