U.S. Senate passes Internet sales tax bill, still big hurdle in the House

By: Richard S. Davis
12:00 am
May 7, 2013

On a strong bipartisan vote, 69-27, the U.S. Senate yesterday passed the Marketplace Fairness Act, or what most of us just call a bill requiring online retailers to collect sales taxes. Mashable has a short, clear explanation of the legislation and why it’s necessary. So does the National Conference of State Legislatures, which strongly supported the bill.

As we wrote previously, should the House concur (no guarantee there), the legislation would produce additional revenue for state budgets. It’s not enough to erase a billion-dollar shortfall, but it would help. The New York Times has a good story, including an indication of how tough things might be in the House.

But opponents say they will try to slow the process down in the House and shift the conversation to their issues: fears that the complexity of collecting the taxes will put many Internet retailers out of business or subject them to an avalanche of audits from state and local governments around the country.

In a “Memo for the Movement,” a coalition of 52 conservatives on Monday demanded that House Republican leaders not bring the Senate bill straight to the House floor and also said House conservatives “should reject any bill that expands the authority of out-of-state governments to regulate businesses with regard to online taxation.”

Things would have to change quickly for state budget negotiators in Olympia to be able to book the new revenue.

Categories: Budget , Categories , Current Affairs , Tax Policy.