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 BoehnerBoehner called Trump about signing government funding bill Ex-GOP rep jests he thought reporter's accidental text was a drunk text from Boehner Gowdy front-runner to be next Oversight chairman MORE (R-Ohio) and Judiciary Committee Chairman Bob GoodlatteBob GoodlatteHouse votes to expand death penalty for police killings House Judiciary Dems call for hearings on Comey ouster Congress should beat the courts when it comes to taxing online retailers MORE (R-Va.) earlier this month to push their case. While BoehnerJohn BoehnerBoehner called Trump about signing government funding bill Ex-GOP rep jests he thought reporter's accidental text was a drunk text from Boehner Gowdy front-runner to be next Oversight chairman 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 WomackSteve WomackLawmakers reintroduce online sales tax bills Dems offer House resolution to force Trump's tax returns GOP blocks Dem effort to request Trump tax returns 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 ChaffetzThis week: Congress awaits Comey testimony Chaffetz, Comey to speak Monday Chaffetz: Jail individuals leaking information 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 ReidThis week: Congress awaits Comey testimony Will Republicans grow a spine and restore democracy? Racial representation: A solution to inequality in the People’s House MORE (D-Nev.), whose home state is heavily reliant on sales tax revenue, and Senate Majority Whip Dick DurbinDick DurbinDem senator compares Trump to Blagojevich Rosenstein: I stand by Comey memo Mueller to ask Congress to step back Russia investigations: report MORE (D-Ill.) have been among the most prominent backers of the Marketplace Fairness Act.

Yet incoming majority leader Sen. Mitch McConnellMitch McConnellConservative groups press Senate on ObamaCare repeal Week ahead: Trump budget coming Tuesday | CBO to unveil health bill score | House hearing on border tax Week ahead: EPA braces for Trump budget 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 CruzTed CruzGOP talks of narrowing ‘blue-slip’ rule for judges Abortion poses hurdle for Senate healthcare bill Senator's photo spurs caption contest MORE (Texas) and Rand PaulRand PaulSheriff Clarke denies plagiarism report, calls reporter a 'sleaze bag' GOP talks of narrowing ‘blue-slip’ rule for judges House votes to expand death penalty for police killings MORE (Ky.) who oppose the bill against long-time supporters like Sens. Lamar AlexanderLamar AlexanderSenate GOP short on ideas for stabilizing ObamaCare markets GOP senators push Trump for DOE research funding Key chairman open to delaying repeal of ObamaCare mandate MORE (Tenn.) and Mike EnziMike EnziConservative groups want debt limit, spending fights separate GOP senators must keep their promises to repeal ObamaCare Collins on all-male healthcare working group: 'The leaders obviously chose the people they want' 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.”