Tags: online | sales | tax | bill | senate | vote

Online Sales Tax Bill Faces Tough Haul in House

Image: Online Sales Tax Bill Faces Tough Haul in House

Monday, 06 May 2013 11:07 AM

By Sandy Fitzgerald

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A bill that ends tax-free online shopping could have difficulty getting through the Republican-controlled House, even though it will likely pass the Senate Monday.

The bill's supporters say brick and mortar stores are hurt when consumers check out their merchandise but decide to go online and buy it to save paying taxes. House Republicans, though, are leery of backing a law that constituents would see as a tax increase, The Wall Street Journal reports.

House Budget Committee Chairman Paul Ryan agreed in a recent speech in Racine, Wis. that the current system is unfair, but is concerned the Senate bill could prompt states to tax more items.

"I'd like to think there's a way to address this inequity without giving the government power to expand taxing authority beyond that intent," he said.

Other prominent Republican lawmakers, including House Speaker John Boehner and House Majority Leader Eric Cantor, have taken no public position on the measure.

Boehner's office has referred questions about the online sales tax to the House Judiciary committee, while Cantor has said Congress should address the fairness issue, but hasn't said how it should be done.

Meanwhile, several powerful retailers are backing the legislation, including Wal-Mart and Amazon, which is increasing its physical presence nationwide, according to the Journal. Two former senators, Democrat John Breaux and Republican Trent Lott, are lobbying for Amazon. The powerful online retailer paid the two and their firm, Patton Boggs LLP, $220,000 in the first quarter of this year, public disclosure records report.

The bill has some powerful opponents as well, including the conservative Heritage Foundation, anti-tax activist Grover Norquist, and NetChoice, a coalition of online businesses. One of those businesses, eBay, also wants to see the online retailer's exemption threshold for having to charge sales taxes raised in the Senate bill from $1 million to $10 million.

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