Reid: Online sales tax could pass this year

By Bernie Becker - 07/19/12 04:50 PM ET

Senate Majority Leader Harry Reid (D-Nev.) on Thursday said lawmakers have made significant progress on an online sales tax measure, and predicted it could even pass Congress this year.

Reid, speaking at a news conference, said he had long been a supporter of the type of proposal being championed by Majority Whip Dick Durbin (D-Ill.) and Sen. Mike Enzi (R-Wyo.), and noted that Internet retailer Amazon is behind it.

The “very fair” proposal would “help these little strip malls we have all over America,” Reid said.

Retail groups and other supporters have lobbied fervently for online sales tax measures in both the House and the Senate, saying the current law favors Internet retailers over traditional brick-and-mortar stores.

As it stands, companies only have to collect sales taxes on Internet purchases from customers in states where they have a physical plant or location.

Some governors, including prominent Republicans, are sympathetic to a federal solution, with reports suggesting that states could bring in billions of dollars in extra revenue with an online sales tax law.

But opponents of the measure — including prominent conservatives like Sen. Jim DeMint (R-S.C.) — say lawmakers should be finding ways to lower Americans’ tax bills, not devising more ways for people to pay.

And even with its support in the states and Reid’s optimism, congressional online sales tax proposals face definite hurdles to getting enacted this year.

For one, there are not many legislative vehicles left for attaching an online sales tax measure to, and the post-election lame-duck session is expected to concentrate on big-ticket issues like the Bush-era tax rates and automatic spending cuts.

Some Republicans have also expressed concern about backing a measure that would cause many customers to pay more than they currently do.

Durbin has said that he believes support for the measure is fairly solid on the Democratic side, though he wasn’t sure Enzi and another prominent GOP supporter, Sen. Lamar Alexander (Tenn.), have rounded up the 15 or 20 Republicans needed to pass it through the Senate.

Enzi has also expressed confidence that a measure could get passed this year, and Alexander has said he expects the bill to go through in either 2012 or 2013.