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Advocates plan massive push for online sales tax

Francis Rivera

Advocates for giving states more freedom to collect sales taxes on online purchases are launching a last-minute lobbying flurry, believing the looming post-election session of Congress will be their best shot to get a bill signed into law.

The bill, known as the Marketplace Fairness Act, has a history of bipartisan Senate support, and its backers have long believed that it is just a matter of time before it gets across the finish line. Now, proponents of the bill have a few reasons to believe that time has come, as Congress prepares for the sort of lame-duck session that is known for deal-making.

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For starters, supporters on Capitol Hill have vowed not to pass an extension of a separate, non-controversial law barring taxes on Internet access unless it’s paired with an online sales tax measure.

On top of that, GOP leaders in both chambers — preparing for potential control of Congress next year — have signaled they want to clear the decks of leftover legislation before starting fresh in 2015.

“There’s a desire to get this gone by the end of the year, and to not have this as a monkey on the back in the next Congress,” said Kip Eideberg, a partner at Finn Partners who works with the International Council of Shopping Centers (ICSC), which supports the bill.

Industry groups are planning an all-out advocacy blitz when lawmakers return to Washington next week. The Senate passed the online sales tax bill in May 2013 by a 69-27 margin, but the House hasn’t moved on the measure.

Supporters say they will soon be regulars in both Democratic and Republican offices on both sides of the Capitol. House Republicans historically have been more of an obstacle; even though the Senate has already passed the bill, lobbyists said they might have to focus their attention there to ensure that the House is forced to deal with the matter.

“No stone will be left unturned,” said one lobbyist working on the issue.

Members of the ICSC, which also runs the Marketplace Fairness Coalition, have held about 100 meetings with lawmakers and staff in their home districts. Once Congress returns to D.C., the group will be bringing its strategy back to the Beltway, they say. 

Those sorts of efforts are an “example of the emotional commitment to the retail community in finding a solution,” said David French of the National Retail Federation, which has been holding meetings with policymakers for years. “The quantity of those grassroots efforts never really let up.”

Under the Marketplace Fairness Act, states could collect a sales tax from online purchases made anywhere in the country, which supporters say would erase an unfair advantage now held by Internet retailers. Currently, because of a 1992 Supreme Court decision, state governments can only tax retailers that have a physical location within their borders.

Opponents of the sales tax bill say it would create huge burdens on smaller online outfits, and have pledged not to be outworked by the retail groups that are seeking an end-of-year victory.

“We’ve spent time in many of the Senate offices, explaining what the defects of the Marketplace Fairness Act are,” said Jonathan Johnson, the chairman of the board of Overstock.com, who was in Washington on Friday 

Johnson predicted that the House wouldn’t accept the current Senate bill if it was sent back across the Rotunda.

Speaker John BoehnerJohn BoehnerOvernight Finance: Puerto Rico bill clears panel | IRS chief vows to finish term | Bill would require nominees to release tax returns Overnight Defense: Pentagon chief fears sequestration's return GOP senator: Reid's 'ramblings' are 'bitter, vulgar, incoherent' MORE (R-Ohio) has made it clear he’s no fan of the bill, and Senate Minority Leader Mitch McConnellMitch McConnellRyan seeks to put stamp on GOP in Trump era Trump and Ryan to speak by phone Bill would require nominees to release tax returns MORE (R-Ky.) voted against it in May 2013. Popular grassroots conservatives including Sens. Ted CruzTed CruzEleven states sue Obama over transgender bathroom directive Poll: Clinton leads Trump in Wisconsin by double digits GOP senators propose sending ISIS fighters to Gitmo MORE (R-Texas) and Rand PaulRand PaulOvernight Defense: VA chief 'deeply' regrets Disney remark; Senate fight brews over Gitmo Paul ties release of 9/11 docs to defense bill Will Ted Cruz let it go? MORE (R-Ky.) — two leading GOP contenders for the presidency in 2016 — are also vocal opponents of the bill, likening it to a giveaway to K Street and major retailers.

Still, Rep. Steve Daines (R-Mont.) is preemptively circulating a letter asking House GOP leadership not to allow the online sales tax bill to be tacked on to other legislation.

Steve DelBianco of NetChoice, who’s also trying to block the bill, said critics do have concerns that GOP leaders, seeking to “clear the decks” for 2015, would just waive the bill forward in response to the pressure of retail groups and Amazon. But he said opponents of the bill, including eBay, would be in a much stronger position if they could make it to January without the Marketplace Fairness Act as law.

“If being outspent would’ve been the method of defeat, we would’ve lost a long time ago,” DelBianco said. “But this is the closest they’ve ever come to pushing this law on American businesses.”

Reps. Bob GoodlatteBob GoodlatteIRS head vows to finish term despite impeachment push House Republicans press case for impeaching IRS commissioner Saudis scramble for Washington allies MORE (R-Va.), the chairman of the House Judiciary Committee, and Jason ChaffetzJason ChaffetzOvernight Cybersecurity: Watchdog report dings Clinton email security IRS head vows to finish term despite impeachment push Top Oversight Dem blames GOP cuts for poor cybersecurity MORE (R-Utah) are working on alternatives to address the patchwork in state laws about collecting an online sales tax. But those bills might not surface before next year, which could be too late for opponents of the current proposal 

The current online sales tax bill does have support from several veteran GOP lawmakers, notably Sens. Lamar AlexanderLamar AlexanderAmerican technology leadership: We can't take it for granted GOP senators: Obama bathroom guidance is 'not appropriate' McConnell touts 'Senate squad' in Wes Anderson-style video MORE (R-Tenn.) and Mike EnziMike EnziGOP blocks slate of Obama judicial nominees Overnight Finance: New rules proposed to curb Wall Street pay GOP senator tries to tie 'No budget, no pay' to funding bill MORE (R-Wyo.) 

Senate Majority Leader Harry ReidHarry ReidOvernight Finance: Puerto Rico bill clears panel | IRS chief vows to finish term | Bill would require nominees to release tax returns Wasserman Schultz fights to keep her job Overnight Defense: Pentagon chief fears sequestration's return MORE (D-Nev.) has said he’ll do “whatever it takes” to pass the measure, which has long been championed by his No. 2, Majority Whip Dick DurbinDick DurbinReid: 'Lay off' Sanders criticism Senators tout 4.5B defense spending bill that sticks to budget Lawmakers seek changes in TSA PreCheck program MORE (D-Ill.).

But one lobbyist opposing the bill said that group of supporters could hurt the bill’s chances in the House.

“The Republican senators who are in favor of it are not ones who draw crowds in the House,” the lobbyist said. “Meanwhile, the Democrats who are for it are on everybody’s most wanted lists. 

Opponents have noted that retail groups and other Marketplace Fairness advocates have repeatedly expressed confidence that the measure was on the cusp of becoming law — only for the bill to remain in limbo.

With that in mind, Johnson of Overstock.com says he hopes the lawmakers who have been with his company don’t succumb to the latest burst of lobbying 

“The people who were opposed to this, on principle, before the election, I hope they won’t change their minds because they are two or six years away from their next election cycle,” he said.