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Senate Passes Internet Sales Tax Bill

6 May, 2013 By: Chris Tribbey

The U.S. Senate passed a bill May 6 that will allow states to collect taxes from online sales, sending it to the Republican-led House, where it faces an uncertain future.

The Marketplace Fairness Act — which passed in the Senate on a 69-27 vote — would allow states to collect taxes on Internet transactions, even if the retailer doesn’t have a physical presence in the state.

Proponents of the bill say it’s only right that online retailers pay the same taxes collected by brick-and-mortar stores, while opponents say the tax laws are too complicated.

House Judiciary Committee chairman Bob Goodlatte, R-Va., said consideration of the bill would be “more thoughtful” in the House.

“I do not believe the Marketplace Fairness Act is sufficiently simplified yet,” he said in a statement. “While it attempts to make tax collection simpler, it still has a long way to go. There is still not uniformity on definitions and tax rates, so businesses would still be forced to wade through potentially hundreds of tax rates and a host of different tax codes and definitions.”

He suggested the bill doesn’t go far enough to protect business from states attempting to collect taxes that actually may not be due to them.

Rep. Steve Womack, R-Ark., urged passage of the bill, saying consumers use brick-and-mortar stores as showrooms, and then buy online to avoid the taxes

“After 20 years, there is finally light at the end of the tunnel for our brick-and-mortar businesses, and today’s bipartisan Senate vote to pass the Marketplace Fairness Act has given even more momentum to close this tax loophole once and for all,” Womack said. “Saving local retail business depends on it, and I — along with Arkansas’s Main Streets — am grateful for the Senate’s leadership on and dedication to this issue. Now, it’s up to the House to act, and I will continue to work with my colleagues to make sure we do so before it’s too late.”

Rep. Jackie Speier, D-Calif., added: “It is time for the government to get out of the business of picking retail winners and losers. My colleagues pay a lot of lip service in support of small business; the Marketplace Fairness Act is a way for them to step up and actually do something.”

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