Senate Dem says online sales tax bill 'will do harm'

“The marketplace fairness legislation as written today will do harm,” Wyden said. “It would force retailers to do a government job of collecting online taxes.”

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The Marketplace Fairness Act would empower states to collect taxes on purchases made online by consumers in their states. But senators in states without sales tax say it would burden retailers in their states and encourage people to buy from foreign retailers that would not be forced to charge tax.

“This bill will favor foreign businesses that will not be subjected to it,” Wyden said. “I don’t see how that makes sense.”

Under current law, 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.

Last month, the Senate passed a budget resolution on a 75-24 vote supporting the Marketplace Fairness language. That strong bipartisan vote showed there is enough support to pass the bill, despite opposition from senators in Oregon, Montana and New Hampshire.

Retail groups such as the National Retail Federation have backed the legislation, which senators have been pushing for nearly two years.

Sen. Mike Enzi (R-Wyo.) introduced S. 743. Sens. Lamar Alexander (R-Tenn.), Dick Durbin (D-Ill.) and Heidi Heitkamp (D-N.D.) are co-sponsoring the bill.