Bipartisan group of senators introduce online sales tax bill

 "The legislation addresses a states’ rights issue: preserving the right of states to collect – or to decide not to collect – taxes that are already owed under state law," Sen. Alexander said in a statement.

 “Most small business people don’t want a government handout. They don’t want special treatment. They just want to be able to compete fairly against other businesses," Sen. Durbin said.

The lawmakers argue the bill will help states to close their budget deficits. 

The measure is similar to Durbin's Mainstreet Fairness Act, which he introduced in July. But unlike that bill, the measure introduced on Wednesday has attracted bipartisan support.

Christina Mulka, a spokeswoman for Durbin, said the senator will focus his attention on pushing the latest version of the legislation.

Daniel Patrick Head, a spokesman for Enzi, said the new bill gives the states more flexibility about how to collect the tax than Durbin's original bill did. It also exempts small retailers from the collection requirements.

The other senators who have signed on to the legislation are Sens. Tim Johnson (D-S.D.), John Boozman (R-Ark.), Jack Reed (D-R.I.), Roy Blunt (R-Mo.) Sheldon Whitehouse (D-R.I.), Bob Corker (R-Tenn.) and Mark Pryor (D-Ark.).           

The National Retail Federation, which represents traditional retailers, praised the bill and promised to intensify its lobbying in favor of an online sales tax.

“As the industry that employs one out of every four Americans, we are determined to help make this goal become reality," Federation President and CEO Matthew Shay said.

But many online companies trashed the measure, arguing it would destroy jobs.

"It does not make sense to expand Internet sales tax burdens on small businesses at a time when we want entrepreneurs to create jobs and economic activity,” Tod Cohen, general counsel at online auction site eBay, said in a statement.

"Congress should be focusing on promoting online commerce — not introducing measures which will stifle it," Kevin Richards, vice president for federal government affairs at trade group TechAmerica, said.

Steve DelBianco, executive director of advocacy group NetChoice, argued that the bill would not produce much new revenue for states. He pointed to a study which found that uncollected sales tax revenues in 2008 were about $3.9 billion, or less than 1 percent of all state and local tax revenue.

“In essence, we’re seeing some members of Congress throw one of our best growth industries under the bus to pursue less than half a penny in new taxes,” he said.  “Does anyone besides big-box retailers really think it’s a good idea to saddle small-business owners with a new tax system?”

One major online retailer that supports the bill is Amazon. The company argues that the country needs a single national framework for collecting online taxes. 

Paul Misener, Amazon's vice president of global public policy, said in a statement that Amazon "strongly supports" the bill and will work with Congress, retailers and the states to pass it into law. 

This post was updated at 5:20 p.m.

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