Senate vote emboldens House lawmakers in push for online sales tax

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Womack said the Senate vote got the attention of House lawmakers and could give cover for lawmakers who want to support the bill but are worried about being perceived as voting for higher taxes.

"It breathed fresh air into the effort on the House side," Womack said.

Last month, 75 senators voted for a non-binding budget resolution amendment expressing support for allowing states to tax online purchases. Although the vote has no legal impact, it was an important demonstration of support for the proposal.

Under current law, states can only collect sales taxes from retailers that have a physical presence in their state. People who order items online from another state are supposed to declare the purchases on their tax forms, but few do.

The Marketplace Fairness Act would empower states to tax online purchases but would exempt small businesses that earn less than $1 million annually from out-of-state sales.

Its supporters argue it would close an unfair loophole that benefits online retailers over local brick-and-mortar stores.

The sponsors in the Senate are Sens. Dick Dubrin (D-Ill.), Mike Enzi (R-Wyo.) and Lamar Alexander (R-Tenn.).

At Thursday's press conference, Speier and Womack were joined by small-business owners who explained that they have struggled to compete with untaxed Internet companies.

"They're playing by the rules, and the exclusive online retailers are not," Speier said. 

Womack said he "rejects out of hand" the argument that the bill is a tax increase. He noted the bill does not force states to collect online sales taxes and said it may allow some states to lower their overall tax rates.

He said he is hopeful that House Judiciary Committee Chairman Bob Goodlatte (R-Va.) will hold a hearing on the bill and move it to a vote. He also said he would be open to attaching the bill as an amendment to another piece of legislation.

The other sponsors of the House bill include Reps. Peter Welch (D-Vt.) and John Conyers (D-Mich.).

Critics worry the legislation will be overly complicated to implement and will stifle online commerce.