Money & Business

Associations Battle Over Online Sales Tax in Congress

By / Dec 3, 2012 (Hemera/Thinkstock)

A bill being pushed in the Senate could force online retailers such as Amazon to collect sales tax nationwide.

If you’ve coasted on the Amazon tax loophole in the past, the free ride may soon be over.

I think we feel that we have a good piece of legislation pulled together, with lots of support. But there’s a decent chance politics could derail it.

For years, the battle over online sales tax has bubbled in the states, but if things go the way of a number of retail groups, we might see a federal mandate on the matter. Not without a fight, though, that is. More details:

The bill: The Marketplace Fairness Act, backed with bipartisan support by Sens. Dick Durbin (D-IL), Lamar Alexander (R-TN), and Mike Enzi (R-WY), would force out-of-state online retailers to collect online sales tax—particularly Amazon, which has struggled in recent years to fend off such laws at the state level. In fact, some states, such as California, have a similar House bill, the Marketplace Equity Act, also in the works, The Washington Times reports.

The backers: Among the major associations supporting the Marketplace Fairness Act include the Retail Industry Leaders Association and National Retail Federation (NRF), which encouraged the bill to be tacked onto the 2013 National Defense Authorization Act. (Durbin proposed the amendment on Friday.) However, the bill may find itself a victim of the fiscal cliff. “I think we feel that we have a good piece of legislation pulled together, with lots of support,” NRF’s Rachelle Bernstein told The Hill. “But there’s a decent chance politics could derail it.”

The opponents: While the bill has bipartisan support, some conservatives oppose the act, including Sen. Jim DeMint (R-SC), who says, “I don’t think it’s been vetted. I don’t think we really know the implications of getting the federal government involved with sales tax.” Major online and online-focused retailers, such as eBay and NetChoice, are working to combat the bill, with NetChoice’s Steve DelBianco suggesting that even if the bill passed the Senate, “It would be handed over to the GOP-controlled House, where enough members recognize a new tax when they see it,” he told The Hill.

Think the Marketplace Fairness Act will get through the fiscal cliff noise to eventually face a vote? Let us know in the comments.

Ernie Smith

Ernie Smith is the social media journalist for Associations Now, a former newspaper guy, and a man who is dangerous when armed with a good pun. More »

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