Reid warns of weekend work with online sales tax bill

The Senate is considering the Marketplace Fairness Act, S. 743, which 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 by forcing them to collect taxes for other state governments.

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“I know many of the Republican colleagues want to attend the opening of the Bush library in Texas. Unfortunately there are senators playing a procedural game to prevent that from happening,” Reid said. “The Senate is essentially being held up by three states.”

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

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.

“Basically what this bill would do is level the playing field between online sellers and brick-and-mortar retailers,” Reid said.

Reid said there are two bipartisan bills the Senate will work on when they return from a state workweek before then taking up comprehensive immigration reform.