Internet Sales Tax Bill Passes Senate, Faces Rough Road In House

As expected, the Marketplace Fairness Act, which would permit states to require internet-based businesses to collect sales tax even if they don’t have a physical presence in the state, easily passed the Senate yesterday:

The Senate approved a long-anticipated Internet sales tax proposal on Monday, moving the legislation one step closer to enactment and paving the way for shoppers to pay sales tax on the majority of online purchases.

The so-called Marketplace Fairness Act 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. The law would only apply to online sellers that have sales of at least $1 million in states where they don’t have physical operations, like a store or a warehouse.

The Senate voted 69 to 27 to approve the bill, which enjoyed bipartisan support. But before it can become law, it must be approved by the House, where Republicans are split on the issue.

Some House Republicans have already expressed support for the bill, arguing that it would level the playing field for small brick-and-mortar retailers. They say it would not create a new tax, but rather enforce the collection of taxes already charged at traditional retailers. But other House Republicans still view that as a tax increase on consumers or say it would overburden Internet businesses in their states.

If the bill does pass, it’s likely to be with the same kind of a mixture of Republican and Democratic votes that we saw in the Senate. What’s not clear is how the House GOP leadership feels about the bill, and specifically whether they’ll allow it to have an easy road to a vote on the House floor or keep it bottled up. In the end, I think it’s inevitable that something like the MFA will pass, whether it will pass this year, though, remains to be seen.

FILED UNDER: Congress, Economics and Business, Quick Takes, Taxes, US Politics
Doug Mataconis
About Doug Mataconis
Doug Mataconis held a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May 2010 and contributed a staggering 16,483 posts before his retirement in January 2020. He passed for too young in July 2021.

Comments

  1. Tony W says:

    The House leadership is waiting for a statement from the president so they can vote the other way.

  2. OzarkHillbilly says:

    But other House Republicans still view that as a tax increase on consumers or say it would overburden Internet businesses in their states.

    Why don’t they just admit that they do not, and never have, believe in anything even remotely resembling the magical unicorn they call “The Free Market.”

  3. Caj says:

    Of course they will pass that. It affects the ‘little’ people out there!! They aren’t being squeezed enough let’s just add another burden to their already struggling lives! Just make sure we don’t touch those oil companies and others who get subsidies!! Can’t have them losing another million in profit, that will never do. It’s pathetic and disgusting that the hard working people out there get hammered all the time and the rich just keep getting richer just the way Republicans like it!

  4. C. Clavin says:

    this is an interesting issue.
    just yesterday i bought a specialized tool at the local hardware store for $275. i could have bought it online for $40 less and not paid taxes…and gotten free shipping. but i needed the tool yesterday.
    throw taxes into the mix and the internet is still going to be cheaper than buying local.
    i’m all for supporting local businesses…but i’m not always willing to eat $50-60.

  5. C. Clavin says:

    another thing…when you have house leadership trying to eliminate over-time pay…then you can assume they don’t really don’t care about you and me paying a little more to shop on the internet.
    if it affected the koch brother’s bottom line…maybe.
    you and me? not so much.

  6. fred says:

    Again the working class and poor folks are getting the shaft. How about a transaction tax on Wall Street transactions. How many trillions would that save taxpayers? Not a word from White House, or mainstream media as usual.

  7. Tyrell says:

    What the government (federal, state, local) will not do to get in the billfolds of working class people. Next will be some misguided individual wanting yard sales and flea markets taxed !!