Retailers to try again for online sales tax

Retailers to try again for online sales tax
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After falling short yet again this year, retail groups pushing online sales tax legislation are going to have to shake up their lobbying approach in the face of a fully GOP-controlled Congress. 

Advocates for a measure that would give states more power to collect sales taxes from out-of-state residents acknowledge they’ll have to focus more on the House in 2015, after their Democratic champions in the Senate were pushed to the minority in November’s midterms.

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But retail groups also insist that their longstanding message — that legislation is needed to correct an unfair imbalance between brick-and-mortar stores and online outfits — doesn’t need to be tweaked much, even as they admit that they likely just missed their best chance yet to get a bill to the president’s desk.

“You’d be silly not to reexamine what you’re doing,” said Jason Brewer of the Retail Industry Leaders Association.

Still, Brewer pointed out that the online sales tax legislation was far from the only measure caught up in congressional gridlock.

“It would be one thing if everything else was passing, and we were the only ones left on the side of the road,” he said.

Groups lobbying for the online sales tax bill, currently known as the Marketplace Fairness Act, say they’ll take the next couple of weeks to regroup, and to find ways to fine-tune their lobbying tactics for the next Congress.

Supporters and opponents say the measure that passed the Senate in May 2013 will have to change to make it through the next Congress — and the House would likely have to take the lead after being the more skeptical of the two chambers in recent years.

House Republican supporters of online sales tax legislation met with Speaker John BoehnerJohn Andrew BoehnerJohn Feehery: A political forest fire Trump's pick for Federal Reserve chief is right choice at right time The two-party system is dying — let’s put it out of its misery MORE (R-Ohio) and Judiciary Committee Chairman Bob GoodlatteRobert (Bob) William GoodlatteRosenstein to testify before House Judiciary Committee next week Conservative pressure on Sessions grows Clock ticking down on NSA surveillance powers MORE (R-Va.) earlier this month to push their case. While BoehnerJohn Andrew BoehnerJohn Feehery: A political forest fire Trump's pick for Federal Reserve chief is right choice at right time The two-party system is dying — let’s put it out of its misery MORE declined to bring up any measure this year, GOP supporters say the Speaker is open to passing legislation next year and that they won’t be as passive in pushing for action.

Rep. Steve WomackStephen (Steve) Allen WomackGOP budget chair may not finish her term Jockeying begins in race for House Budget gavel Trump reopens fight on internet sales tax MORE (R-Ark.) and other supporters are pushing Congress to legislate over a 1992 Supreme Court decision that said states could only collect sales taxes from businesses that have a physical location within their borders. Such legislation could raise as much as $23 billion a year for state governments, according to some estimates; advocates point out the revenue would come from taxes already owed but rarely paid.

But to opponents, the measure would act as a tax increase on consumers. It would also favor big-box retailers over fledgling Internet sellers, they argue.

Rep. Jason ChaffetzJason ChaffetzDem demands documents from TSA after scathing security report Chaffetz replacement sworn in as House member Democrats expand House map after election victories MORE (R-Utah) is also working on a bill that advocates say should come out next year and could assuage conservative concerns about how many businesses would be forced to collect sales taxes and whether those shops can be audited by out-of-state tax authorities. 

Womack told The Hill on Tuesday that Goodlatte has been blocking Chaffetz’s measure, and that he believes Boehner wants the Judiciary chairman to find a solution to the online sales tax riddle.

“It’s not the kind of legislation that everybody jumps for joy to vote on,” Womack said. “But it’s one of those tough issues we have to put to bed.”

On top of that, a noncontroversial moratorium against Internet access taxes — which online sales tax supporters want to pair their bill with — has to be taken up again next year, giving advocates another opportunity to marry the two.

Retail advocates say there will be plenty of opportunity to build on those positive developments in the House. They also speculate that having full GOP control of Congress could actually help them, arguing it would lead to less sniping between the House and Senate that has at times held up even the most noncontroversial of measures.

David French of the National Retail Federation said advocates would continue to “carpet bomb Congress with our message,” after his group and others have sponsored fly-ins from local retailers and state and local government officials.

“We’ve told the Hill all along that this is going to pass because it needs to happen, and eventually people will see that,” French added. “They’re not going to pass a bill just because we have a good lobbying strategy.”

But there’s also no doubt that next year’s crop of lawmakers will pose a host of challenges for the coalition of groups supporting online sales tax legislation, which also includes state government groups and the online giant Amazon.

Senate Majority Leader Harry ReidHarry ReidBill O'Reilly: Politics helped kill Kate Steinle, Zarate just pulled the trigger Tax reform is nightmare Déjà vu for Puerto Rico Ex-Obama and Reid staffers: McConnell would pretend to be busy to avoid meeting with Obama MORE (D-Nev.), whose home state is heavily reliant on sales tax revenue, and Senate Majority Whip Dick DurbinRichard (Dick) Joseph DurbinDemocrats turn on Al Franken Minnesota's largest newspaper calls on Franken to resign Democratic senator predicts Franken will resign Thursday MORE (D-Ill.) have been among the most prominent backers of the Marketplace Fairness Act.

Yet incoming majority leader Sen. Mitch McConnellAddison (Mitch) Mitchell McConnellGOP strategist donates to Alabama Democrat McConnell names Senate GOP tax conferees Brent Budowsky: A plea to Alabama voters MORE (R-Ky.) voted against the bill when it came up in the Senate last year. And senior Republican aides say he has no interest in revisiting the online sales tax next year, given that it divided the Senate GOP conference nearly down the middle in 2013 — pitting grassroots favorites like Sens. Ted CruzRafael (Ted) Edward CruzDebbie Wasserman Schultz marks 10 years as breast cancer survivor Foreign agent registration is no magical shield against Russian propaganda Let Trump be Trump and he'll sail through 2020 MORE (Texas) and Rand PaulRandal (Rand) Howard PaulLexington mayor launches bid for Congress Trump-free Kennedy Center Honors avoids politics Meet the Iran hawk who could be Trump's next secretary of State MORE (Ky.) who oppose the bill against long-time supporters like Sens. Lamar AlexanderAndrew (Lamar) Lamar AlexanderOvernight Finance: Trump says shutdown 'could happen' | Ryan, conservatives inch closer to spending deal | Senate approves motion to go to tax conference | Ryan promises 'entitlement reform' in 2018 Senate approves motion to go to tax conference House conservatives, Ryan inch closer toward spending deal MORE (Tenn.) and Mike EnziMichael (Mike) Bradley EnziMcConnell names Senate GOP tax conferees Live coverage: Senate Republicans pass tax bill The Hill's Whip List: Where Republicans stand on Senate tax bill MORE (Wyo.).

Boehner has also long been lukewarm at best about the online sales tax issue, saying he was strongly against the version that passed the Senate.

In fact, some opponents have said for weeks that they’ll be on much stronger ground come January, with more lawmakers sympathetic to their argument that the legislation would stifle online retailers.

“You worry about it. You keep your eye on it. But I don’t think it moves,” anti-tax crusader Grover Norquist said about the chances for legislation in a new Congress.

This year’s setback for online sales tax supporters also shows the challenges lobbyists face in finding new ways to advocate after years of inaction — especially if they’ve repeatedly said it was a matter of when, not if, that legislation will become law.

“I’ve worked on it for 18 years,” Enzi said Tuesday. “I can work on it for 19.”