Advocates plan massive push for online sales tax

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 Andrew BoehnerDems face hard choice for State of the Union response Even some conservatives seem open to return to earmarks Overnight Finance: Trump, lawmakers take key step to immigration deal | Trump urges Congress to bring back earmarks | Tax law poised to create windfall for states | Trump to attend Davos | Dimon walks back bitcoin criticism MORE (R-Ohio) has made it clear he’s no fan of the bill, and Senate Minority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellSessions: 'We should be like Canada' in how we take in immigrants NSA spying program overcomes key Senate hurdle Overnight Finance: Lawmakers see shutdown odds rising | Trump calls for looser rules for bank loans | Consumer bureau moves to revise payday lending rule | Trump warns China on trade deficit MORE (R-Ky.) voted against it in May 2013. Popular grassroots conservatives including Sens. Ted CruzRafael (Ted) Edward CruzWith religious liberty memo, Trump made America free to be faithful again Interstate compacts aren't the right way to fix occupational licensing laws Texas Dem: ‘I don’t know what to believe’ about what Trump wants for wall MORE (R-Texas) and Rand PaulRandal (Rand) Howard PaulNSA spying program overcomes key Senate hurdle Fix what we’ve got and make Medicare right this year Despite amnesty, DACA bill favors American wage-earners 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 GoodlatteRobert (Bob) William GoodlatteFreedom Caucus chair: GOP leaders don't have votes to avoid shutdown Sessions: 'We should be like Canada' in how we take in immigrants GOP leaders pitch children's health funding in plan to avert shutdown MORE (R-Va.), the chairman of the House Judiciary Committee, and Jason ChaffetzJason ChaffetzHouse Oversight slams TSA after report says officials 'interfered' in disciplinary case Gowdy steps down from Ethics Committee, citing 'challenging workload' Criminal referrals by members of Congress raise procedural questions 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 AlexanderAndrew (Lamar) Lamar AlexanderWeek ahead: Lawmakers near deal on children's health funding Ryan suggests room for bipartisanship on ObamaCare Time to end fiscal year foolishness MORE (R-Tenn.) and Mike EnziMichael (Mike) Bradley EnziGOP is addressing tax cuts and a pension bill that could help coal miners Overnight Finance: Congress sends Trump funding bill to avert shutdown | WH sees 'tentative' deal on defense spending | GOP discovers corporate tax snag | Consumer bureau fight heats up | Apple could see B windfall from tax bill Overnight Finance: Congress sends Trump bill to avert shutdown | GOP discovers corporate tax snag | CFPB leadership battle rages MORE (R-Wyo.) 

Senate Majority Leader Harry ReidHarry Mason ReidDems search for winning playbook Dems face hard choice for State of the Union response The Memo: Immigration battle tests activists’ muscle 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 DurbinRichard (Dick) Joseph DurbinMcCarthy: ‘No deadline on DACA’ Ex-Sheriff David Clarke: Trump only one who 'cares about black American citizens' DHS chief takes heat over Trump furor 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.