Senate passes internet sales tax bill amid opposition
from conservatives
Bill to overturn 1992 court decision has support of
Obama, Amazon and Walmart – but its future in the House is uncertain
guardian.co.uk, Monday 6 May 2013 18.22 EDT
The US Senate on Monday passed a bill aimed at ending
tax-free shopping on the internet but the move looks set to face fierce
opposition before it becomes law.
The Marketplace Fairness Act, which has cross-party
supporter and the backing of powerful retailers, would give states the power to
require retailers with sales over $1m to collect state and local sales taxes
for online purchases.
The bill has the support of president Barack Obama the
majority of senators including Republican John McCain but Marco Rubio, seen a
potential Republican presidential hopeful, and Rand Paul both voted against the
bill.
The bill passed the Senate by 70 votes to 24 but faces a
second test in the House of Representatives where internet retailers and
conservatives are already lobbying against the tax. House leaders have yet to
schedule hearings or votes on their version of the measure.
The legislation would overturn a 1992 supreme court
ruling that said a state could not force a retailer to collect sales tax unless
the retailer had a physical presence in the state.
The bill has aligned unlikely parties. Amazon, the
largest online retailer, has joined its bricks-and-mortar rivals including
Walmart to support the act. Amazon was once a staunch critic of the tax but as
it has built more distribution centers it has become liable for sales tax in
more states and is now a backer.
The largest online opponent is eBay, which has campaigned
against the bill and organised a mass protest by its sellers. Other opponents
include numerous conservative and antitax groups including Americans for Tax
Reform, FreedomWorks and Heritage Action.
Ahead of the vote the National Retail Federation called
for Congress to "level the playing field" and tax online retailers.
"The Marketplace Fairness Act is a commonsense piece of legislation
necessary to modernize and streamline our federal and state understanding of
sales tax laws so that they can keep current with real world change in the
marketplace," said NRF senior vice president David French.
"As the retail industry evolves and digital commerce
becomes a more prominent portion of total retail sales, it is critical that the
tax laws not discriminate between businesses based on how their products are
distributed," French said.
"This collection disparity has tilted the
competitive landscape against local stores, creating a crisis for
brick-and-mortar retailers around the country and in your state," French
said.
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