Wyden says online sales tax bill creates a new tax

S. 743 would empower states to collect taxes on purchases made online by consumers in their states. But senators in states without sales tax, such as Oregon, say it would burden retailers in their states by forcing them to collect taxes for other state governments.

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“The Senate is on course to consider profoundly misguided legislation,” Wyden said. “The Marketplace Fairness Act, but it is anything but fair.”

The bill would exempt small businesses that earn less than $1 million annually from out-of-state sales. 

A sponsor of the bill, Sen. Dick Durbin (D-Ill.) said his bill would not be a new tax because sales tax already exists.

“This is not a new tax,” Durbin said. “It creates a method for compliance or collection of an existing tax.”

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 non-binding 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.