Wyden: Durbin adds 'sugar to a very bitter cup of coffee' with online sales tax bill

Durbin tried to get votes on three amendments, one of which was from Sens. Mark Pryor (D-Ark.) and Roy Blunt (R-Mo.) that would have extended the Internet Tax Freedom Act for another 10 years. Wyden was an original author of the Internet Tax Freedom Act.

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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.

“We are just asking retailers that when you make a sale in that state you collect the sales tax in that state,” Durbin said.

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.

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 or are even aware of the law.

Senate Finance Committee Chairman Max Baucus (D-Mont.) and others who opposed the bill said it should have gone through committee before coming to the Senate floor.

“You just can’t write the bill on the floor of the Senate,” Baucus said. “You have to go to committee to work these things out.”

Most opposition to the bill has come from conservative GOP members joined by lawmakers from three states that don’t have sales tax: Montana, New Hampshire and Oregon.

If those opposing the bill continue to block progress, the next vote will be on a motion to end debate on Friday morning and final passage likely wouldn’t come until Saturday afternoon.

On Wednesday, the Senate voted 75-22 to proceed to the bill and last month the body passed a non-binding budget resolution supporting the Marketplace Fairness language on a 75-24 vote.

Those votes suggest supporters of the bill are likely to see it win approval in the Senate later this week. Its path through the House, despite the support of many GOP governors, is less clear.