Gates and Buffett spoke on CNBC this morning.

Billionaire buddies Bill Gates and Warren Buffett wholeheartedly agree on one thing: Online retailers need to be taxed.

Speaking on CNBC this morning, Gates and Buffett discussed a bevy of topics including the bill that’s expected to pass the U.S. Senate today which could make it easier for states to collect sales tax from purchases made online, whether the online retailer has a physical retail presence in the state or not.

As it stands now, states can only require retailers with a physical presence within their borders to collect tax.

“The bill that asks them to collect these taxes makes a lot of sense,” Gates said this morning. “It’s very unfair to the person who has a physical store. Not only do they have those expenses, but the other person isn’t collecting the sales tax. This is a good thing for state budgets and a good thing for fairness in terms of the competitive framework.”

Buffett agreed, saying that it was “unfair” for people to walk into physical stores, look at an item and then order it from someone else out-of-state without paying tax.

The measure is expected to pave the way to a more cohesive sales tax collection process, rather than what some view as a mishmash system that now varies by state. Should the bill finally pass, it could potentially be a major windfall for most states who are losing an estimated $23 billion in tax revenue every year, according to The National Conference of State Legislatures, because of their inability to tax online purchases.

The Marketplace Fairness Act has created strange bedfellows and is a complex issue in which two of the biggest names in e-commerce, and eBay, are on opposite sides of the fence.

Flickr photo via DonkeyHotey
Flickr photo via DonkeyHotey

There’s an exemption on the legislation for online merchants who derive less than $1 million in out-of-state sales. eBay CEO John Donahoe believes that should apply to businesses with less than $10 million in out-of-state sales or fewer than 50 employees. He also suggested that the legislations would benefit, one of eBay’s key rivals.

In addition to, supporters of the Marketplace Fairness Act have included large retailers such as Best Buy and Wal-Mart. Also, some smaller retailers are supporting the effort. GeekWire contributor Angel Djambazov wrote a great piece earlier this year explaining why Amazon and others are supporting the legislation.

Amazon has brokered deals in recent years with a number of states to begin collecting sales tax, changing its hard stance on the issue. The move also comes as the company establishes more brick-and-mortar efforts across the country, including through its Amazon Lockers program.

Gates also touched on immigration reform, fighting global diseases, charitable giving and his future on the Berkshire Board. Watch the interview here.

Previously on GeekWire: Bill Gates and Paul Allen reprise classic Microsoft photo, three decades later 

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  • Harsh Reality

    Gee Bill, how about getting your Microsoft homies to pay their fair share of income tax too, instead of laundering the money through a Reno, Nevada shell company.

  • RobertinSeattle

    Totally agree with Harsh Reality. Leading by example is always the best evidence of standing behind what you tell others to do. Two of our largest companies, Microsoft and Boeing need to collect their share of sales tax for the State of Washington instead of dodging it. Perhaps MS could not only move their offsite offices from Nevada but they could also bring their offshore production back from non-taxed Ireland as well.

    And while we’re at it, Boeing should be banned from closing delivery transactions offshore by flying their clients taking delivery into international waters when handing over possession so they can help the customer avoid paying state sales tax in the millions every year. Washingtonians should be enjoying a 5% sales tax over the years instead of seeing our sales tax spiral upward as Microsoft and Boeing continue to grow while helping customers avoid sales tax. They’re not even avoiding taxes for themselves; they’re actually aiding and abetting their customers in avoiding sales tax. Isn’t that considered fraud if you and I do it?

    And what’s the most evil part of this scam? The State looks the other way while these hundreds of millions go uncollected every year. We’re not broke. We’re simply being robbed.

    Enough is enough!

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