Companies call for hearing on Internet sales tax

A coalition of companies and trade associations on Wednesday urged the Senate Finance Committee to hold a hearing on a bill that would allow states to tax online purchases.

The House Judiciary Committee held a hearing on a similar proposal last year.

Under current law, people who buy goods online are supposed to declare those purchases on their tax forms, but few do. As a result, most people do not pay taxes on their online purchases.

The companies, which included traditional retailers such as Wal-Mart, Target, Best Buy and Barnes and Noble, said an online sales tax would "level the playing field between traditional brick-and-mortar and e-commerce retail businesses."

They claimed the bill would help states collect an additional $23 billion in taxes.

"We urge the Finance Committee to hold a hearing to create a record of support for passage in the Senate so that Congress can act to address this inequity this year," the companies wrote in a letter to the panel's top lawmakers. 

Online giant Amazon also signed on to the letter. The company favors a single national framework for collecting online sales taxes rather than having a patchwork of state laws.

But other Internet companies such as auction site eBay oppose the legislation and say it would stifle e-commerce.

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