Senate approves Internet sales tax; opposition looms in House

Arlington, Va. -- The U.S. Senate on late Monday approved the long-debated Internet sales tax proposal, known as the Marketplace Fairness Act, by a bipartisan vote of 69 to 27. The Obama administration has already endorsed the bill, but before it can become law it must be approved by the House, where Republicans are split on the bill.



The legislation would allow the 45 states (and the District of Columbia) that currently charge sales taxes to require large online retailers to collect tax on purchases made by their residents. While some House Republicans have expressed support for the measure, others view it another tax increase on consumers or express fear it would overburden Internet businesses in their states.



The Retail Industry Leaders Association (RILA) issued the following statement in response to the Senate vote to pass the legislation, which it described as aimed at giving states the power – if they so choose – to better enforce their sales tax laws and to level the playing field for Main Street merchants.



The legislation, sponsored by Senators Mike Enzi (R-WY) Richard Durbin (D-IL), Lamar Alexander (R-TN) and Heidi Heitkamp (D-ND), passed the Senate by more than a two to one margin.



“The Senate’s overwhelmingly bipartisan passage of this legislation foreshadows the end of the special treatment of big online businesses at the expense of retailers on Main Street,” said Bill Hughes, senior VP for government affairs. “After such a resounding vote in the Senate, we look forward to a constructive debate in the House to level the playing field for all retailers this year.”



“For too long the Main Street retailers that are an integral part of their communities have faced tax rules that put them at a disadvantage to their out of state, online-only competitors. The Senate has voted to ensure that the market, not government, determines winners and losers,” Hughes continued. “We are confident the House will reach the same conclusion."