By Brendan Sasso - 08/11/11 07:00 PM EDT
“The governor believes that the issue around Internet sales tax requires a national solution, not a piecemeal approach at the state level,” Smith said.
Currently, laws require consumers to report online purchases on their tax forms, but few do.
Supporters of Durbin’s bill, the Main Street Fairness Act, argue that allowing online retailers to escape sales taxes gives them an unfair advantage over traditional, brick-and-mortar stores. They also say the bill will help states close their budget gaps.
Retail associations and Amazon support the measure. Although Amazon has fought online sales-tax proposals at the state level, its representatives say they support a uniform, national standard.
Online auction site eBay and anti-tax groups oppose the bill.
Dean Zerbe, managing director of the consulting company Alliant Group and a former counsel to the Senate Finance Committee, said the bill is unlikely to pass.
“It’s the most annoying tax increase of all,” Zerbe said. “You have to vote to raise taxes, but you don’t get to spend the revenue.”