WASHINGTON – A bill that would allow states to collect taxes from online sales cruised through the U.S. Senate Monday with bipartisan support, but the legislation’s future in the GOP-controlled house is unknown.
Fueling support for the Internet Sales Tax legislation are state and local governments hungry for additional revenue. The National Conference of State Legislatures, which supports the bill, estimated that states lost out on $26 billion in sales taxes in 2012 alone. The National Governors Association has also endorsed the bill.
While the legislation has broad support on the state and federal level, it faces opposition from anti-tax activists, lawmakers in states without a sales tax, and pockets of opposition within the business community. One notable opponent is eBay, which is seeking to exempt online sellers with less than $10 million in annual revenue or fewer than 50 employees from having to collect Internet sales taxes.
On Monday, the Senate approved the bill by a vote of 69-27.
A bipartisan effort is underway in the House to advance legislation similar to the Senate bill. However, the bill has to go through the Judiciary Committee where the chairman has voiced reservations about the bill’s complexity and burdening business owners with the obligation to understand tax codes in other states.
The delay will give opponents of the bill more time to mobilize against it and buy House leaders more time to see if there are enough votes to pass it.