US Senate passes bill allowing Internet sales tax - WSLS 10 NBC in Roanoke/Lynchburg Va

US Senate passes bill allowing Internet sales tax

Posted: Updated:
WASHINGTON DC (WFLA) -

The Senate sided with traditional retailers and financially strapped state and local governments Monday by passing a bill that would widely subject online shopping - for many a largely tax-free frontier - to state sales taxes.
    
The Senate passed the bill by a vote of 69 to 27, getting support from Republicans and Democrats alike. But opposition from some conservatives who view it as a tax increase will make it a tougher sell in the House. President Barack Obama has conveyed his support for the measure.
    
Under current law, states can only require retailers to collect sales taxes if the store has a physical presence in the state.
    
That means big retailers with stores all over the country like Wal-Mart, Best Buy and Target collect sales taxes when they sell goods over the Internet. But online retailers like eBay and Amazon don't have to collect sales taxes, except in states where they have offices or distribution centers.
    
As a result, many online sales are tax-free, giving Internet retailers an advantage over brick-and-mortar stores.
    
"We ought to have a structure in place in the states that treats all retail the same," said Matthew Shay, president and CEO of the National Retail Federation. "Small retailers are collecting (sales tax) on the first dollar of any sale they make, and it's only fair that other retailers who are selling to those same customers the same product have those same obligations."
    
The bill would empower states to require businesses to collect taxes for products they sell on the Internet, in catalogs and through radio and TV ads. Under the legislation, the sales taxes would be sent to the state where the shopper lives.
    
Supporters say the current tax disparity is turning some traditional stores into showrooms, where shoppers pick out items they like, then buy them on the Internet to avoid sales taxes.
    
"It's about the way commerce has changed in America," said Sen. Dick Durbin, D-Ill. "Bookstores, stores that sell running shoes, bicycles and appliances are at a distinct disadvantage. They've become showrooms."
    
Internet giant eBay is leading the fight against the bill, along with lawmakers from states with no sales tax and several prominent anti-tax groups. The bill's opponents say it would put an expensive obligation on small businesses because they are not as equipped as national merchandisers to collect and remit sales taxes at the multitude of state rates.
    
"Giant retailers have a requirement to collect sales taxes nationwide because they have physical presence nationwide," eBay president John Donahoe wrote in an online column over the weekend. "Likewise, today small retail stores and online retailers collect sales taxes for the one state where they are located. That's a fair requirement."
    
"If the bill passes, small online businesses would have the same tax compliance obligations and face the same enforcement risks as giant retailers, despite the fact that they are usually located in just one state."
    
Businesses with less than $1 million in online sales would be exempt. EBay wants to exempt businesses with up to $10 million in sales or fewer than 50 employees.
    
Some states have sales taxes as high as 7 percent, plus city and county taxes that can push the combined rate even higher. For example, the combined state and local sales tax is 9 percent in Los Angeles and 9.25 percent in Chicago. In New York City, it's 8.5 percent and in Richmond, Va., 5 percent. In many states, shoppers are already required to pay unpaid sales tax when they file their state income tax returns. However, states complain that few taxpayers comply.
    
Many governors - Republicans and Democrats - have been lobbying the federal government for years for the authority to collect sales taxes from online sales.
    
The issue is getting bigger for states as more people make purchases online. Last year, Internet sales in the U.S. totaled $226 billion, up nearly 16 percent from the previous year, according to government estimates.
    
States lost a total of $23 billion last year because they couldn't collect taxes on out-of-state sales, according to a study done for the National Conference of State Legislatures, which has lobbied for the bill. About half of that was lost from Internet sales; half from purchases made through catalogs, mail orders and telephone orders, the study said.
    
Supporters say the bill makes it relatively easy for Internet retailers to comply. States must provide free computer software to help retailers calculate sales taxes, based on where shoppers live. States must also establish a single entity to receive Internet sales tax revenue, so retailers don't have to send it to individual counties or cities.
    
Opponents worry the bill would give states too much power to reach across state lines to enforce their tax laws. States could audit out-of-state businesses, impose liens on their property and, ultimately, sue them in state court.
    
In the Senate, lawmakers from three states without sales taxes are leading the opposition: Montana, New Hampshire and Oregon. They argue that businesses based in their states should not have to collect taxes for other states.
    
Delaware also has no sales tax, though Delaware's two senators support the bill.
    
Grover Norquist, an anti-tax advocate, and the conservative Heritage Foundation oppose the bill, and many Republicans have been wary of crossing them.
    
Even so, the issue has a bipartisan flavor. The main sponsor, Sen. Mike Enzi, is a conservative Republican from Wyoming. He has worked closely with Durbin, a liberal Democrat.
    
In the House, Republican Speaker John Boehner has not commented publicly about the bill, giving supporters hope that he could be won over.
    
Rep. Bob Goodlatte, R-Va., chairman of the House Judiciary Committee, which would have jurisdiction over the bill, has cited problems with the legislation but has not rejected it outright.
    
"While it attempts to make tax collection simpler, it still has a long way to go," Goodlatte said in a statement. Without more uniformity in the bill, he said, "businesses would still be forced to wade through potentially hundreds of tax rates and a host of different tax codes and definitions."
    
Goodlatte said he's "open to considering legislation concerning this topic but these issues, along with others, would certainly have to be addressed."

  • 8 On Your SideMore>>

  • Hyundai recalls 888,700 Sonata Sedans

    Hyundai recalls 888,700 Sonata Sedans

    Wednesday, July 30 2014 10:14 PM EDT2014-07-31 02:14:48 GMT
    Over 800,000 Hyundai Sonata Sedans have been recalled. Over 800,000 Hyundai Sonata Sedans have been recalled.
    Hyundai is recalling its popular Sonata midsize sedan to fix problems with the gear shift levers.The recall covers 883,000 cars from the 2011 through 2014 model years.Stay connected with the news of the day.
    Hyundai is recalling its popular Sonata midsize sedan to fix problems with the gear shift levers.The recall covers 883,000 cars from the 2011 through 2014 model years.Stay connected with the news of the day.
  • Removal of tons of stinky rice near Port of Tampa begins

    Removal of tons of stinky rice near Port of Tampa begins

    Wednesday, July 30 2014 5:06 PM EDT2014-07-30 21:06:23 GMT
    The nasty stench near the Port of Tampa may get better soon. Dump trucks worked to remove some of the 1,000 tons of rotting rice on the private land Wednesday. 8 On Your Side discovered the shipment of bad rice, rotting under tarps on property owned by Tampa Marine Terminals on Tuesday.
    The nasty stench near the Port of Tampa may get better soon. Dump trucks worked to remove some of the 1,000 tons of rotting rice on the private land Wednesday. 8 On Your Side discovered the shipment of bad rice, rotting under tarps on property owned by Tampa Marine Terminals on Tuesday.
  • SAFETY ALERT: Saltwater bacteria kills 1 in Sarasota

    SAFETY ALERT: Saltwater bacteria kills 1 in Sarasota

    Wednesday, July 30 2014 3:50 PM EDT2014-07-30 19:50:00 GMT
    WFLA file photo.WFLA file photo.
    A death in Sarasota County has health officials reminding people about a bacteria in Florida's coastal waters that has the potential to cause serious illness, even death. Other counties in Tampa Bay have reported cases of Vibrio vulnificus.
    A death in Sarasota County has health officials reminding people about a bacteria in Florida's coastal waters that has the potential to cause serious illness, even death. Other counties in Tampa Bay have reported cases of Vibrio vulnificus.
  • NewsMore>>

  • Family, friends hold vigil for slain Sarasota teen

    Family, friends hold vigil for slain Sarasota teen

    Wednesday, July 30 2014 10:49 PM EDT2014-07-31 02:49:45 GMT
    Family and friends of 17-year-old Teria'le Rawls gathered for a memorial service Wednesday night in Sarasota. Family and friends of 17-year-old Teria'le Rawls gathered for a memorial service Wednesday night in Sarasota.
    There wasn’t a dry eye in sight as friends and family of 17 year-old Teria’le Rawls gathered for a memorial outside her Sarasota home on Wednesday night.Rawls was shot and killed early Monday morning when she was hit by a stray bullet while in the parking lot of the Royal Palm Movie Theater in Manatee County.
    There wasn’t a dry eye in sight as friends and family of 17 year-old Teria’le Rawls gathered for a memorial outside her Sarasota home on Wednesday night.Rawls was shot and killed early Monday morning when she was hit by a stray bullet while in the parking lot of the Royal Palm Movie Theater in Manatee County.
  • Seminole man injured in crash on Blind Pass Rd.

    Seminole man injured in crash on Blind Pass Rd.

    Wednesday, July 30 2014 10:00 PM EDT2014-07-31 02:00:01 GMT
    The crash occurred just after 1:30 pm Wednesday.The crash occurred just after 1:30 pm Wednesday.
    A 27-year-old Seminole man was seriously injured Wednesday afternoon when the bicycle he was riding was struck by a vehicle at the intersection of Blind Pass Rd. and 77th Ave. in St. Pete Beach.Adam Keehnle was transported to Bayfront Medical Center in St. Petersburg with life-threatening injuries.
    A 27-year-old Seminole man was seriously injured Wednesday afternoon when the bicycle he was riding was struck by a vehicle at the intersection of Blind Pass Rd. and 77th Ave. in St. Pete Beach.Adam Keehnle was transported to Bayfront Medical Center in St. Petersburg with life-threatening injuries.
  • Pool parasite invades Pinellas County

    Pool parasite invades Pinellas County

    Wednesday, July 30 2014 9:19 PM EDT2014-07-31 01:19:12 GMT
    Health officials say the parasite that causes 'Crypto' could be in your pool. Health officials say the parasite that causes 'Crypto' could be in your pool.
    Health Department officials in Pinellas County are putting out a warning about a parasite that can lurk in swimming pools and water parks.

    Health Department officials in Pinellas County are putting out a warning about a parasite that can lurk in swimming pools and water parks. And, if it invades your body, you're in for a rough ride - it's called Cryptosporidium.


  • Virginia Settles ABC Lawsuit

    Virginia Settles ABC Lawsuit

    Wednesday, July 30 2014 10:09 PM EDT2014-07-31 02:09:02 GMT
    Attorney General Mark Herring says the Commonwealth has reached a settlement with Elizabeth Daly in her $40 million lawsuit against several agents of the Virginia Department of Alcoholic Beverage Control.
    Attorney General Mark Herring says the Commonwealth has reached a settlement with Elizabeth Daly in her $40 million lawsuit against several agents of the Virginia Department of Alcoholic Beverage Control.
  • Franklin County accident causes lane closures on Brooks Mill Road

    State Trooper injured in accident on Brooks Mill Road

    State Trooper injured in accident on Brooks Mill Road

    Wednesday, July 30 2014 3:31 PM EDT2014-07-30 19:31:25 GMT
    State Police confirm that a trooper was involved in a crash Tuesday night.
    State Police confirm that a trooper was involved in a crash Tuesday night.
  • Fugitive sex offender captured in Roanoke

    Fugitive sex offender captured in Roanoke

    Fugitive sex offender captured in Roanoke

    Wednesday, July 30 2014 12:41 AM EDT2014-07-30 04:41:44 GMT
    ROANOKE (WSLS) - A man wanted for sex crimes against a minor was captured in Roanoke during a traffic stop.
    ROANOKE (WSLS) - A man wanted for sex crimes against a minor was captured in Roanoke during a traffic stop.
Powered by WorldNow

WSLS 10, P.O. Box 10
Roanoke, VA 24022-0010

Telephone: 540.981.9110
Fax: 540.343.3157
Email: news@wsls.com

Can't find something?
Powered by WorldNow
All content © Copyright 2000 - 2014 Media General Communications Holdings, LLC. A Media General Company.