WASHINGTON – The U.S. Senate will vote on final passage of a bill that would allow states to collect online sales tax when senators return May 6 from a weeklong recess.
Lawmakers voted 63-30 last week to end debate on The Marketplace Fairness Act (S. 743), and then voted 75-22 to proceed to the bill. They also passed a nonbinding budget resolution supporting the bill’s language with a 75-24 vote.
Insiders say the strong votes suggest the bill will win approval. Final passage requires only a majority. Yet, analysts say the bill’s future in the U.S. House of Representatives is not as clear.
The bill would exempt small businesses that earn less than $1 million annually from out-of-state sales and requires states to provide retailers with software to calculate sales taxes based on a buyer’s zip code.
Currently, states can only collect sales taxes from retailers that have a physical presence in their state. People who order items online from another state are supposed to declare the purchases on their tax forms, but few do or are even know the law exists.
Dick Durbin (D-IL) calls the bill “very straight forward” and says that it will allow the states to ask Internet retailers when they sell in the state to collect sales tax. However, Senate Finance Committee Chairman Max Baucus (D-MT) and others who oppose the bill, say it should have gone through committee before coming to the senate floor.
Those supporting the bill have called it a “states’ rights bill” because it would allow states – many of which are battling large budget deficits – to collect the revenue they need to fund state programs.
Reps. Steve Womack (R-AR), Jackie Speier (D-CA), Peter Welch (D-VT) and John Conyers Jr. (D-MI) have introduced companion legislation in the House.