Reid signals he'll bring sales tax bill to Senate floor

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 "Senator Baucus is discussing the issue with Leadership and his colleagues on the Committee," a Senate Finance Committee aide said.

"The proposal in its current form has too many unanswered questions and presents a huge burden for small businesses in Montana and across America," the aide added.

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

The Marketplace Fairness Act is backed by Sens. 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.), 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 (R-Wyo.) and 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 (R-Tenn.).

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. 

The bill's supporters argue it would close an unfair loophole that benefits online retailers over local brick-and-mortar stores. Critics, including some online businesses and anti-tax groups, worry the legislation will be overly complicated to implement and will stifle online commerce.

David French, a lobbyist for the National Retail Federation, said he is "thrilled" with Reid's decision to move the bill to the floor.

"It's a very positive sign. It's earlier than we expected," French said. 

He said he is optimistic the bill will have a strong margin of support in the Senate, and added that a Senate vote can help build momentum in the House. 

An aide to Durbin said the sponsors of the bill are "keeping all options open in order to move the bill."

"This is one of those options," the aide explained.

But opponents of the bill expressed dismay at Reid's move. 

"The actual legislation deserves a hearing in Senate Finance where I think it would be clear to all American businesses that they would be exposed to new audits in 46 states," said Steve DelBianco, the executive director of business group NetChoice.

He said he expects the House Judiciary Committee will take a "hard look at the constitutional and interstate commerce issues" with the bill.

The sponsors of a companion bill in the House are Reps. 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.), Jackie Speier (D-Calif.), Peter WelchPeter Francis WelchTrump talks tough but little action seen on drug prices Frustrated with Trump, Dems introduce drug pricing bill Lawmakers try again on miners’ pension bill MORE (D-Vt.) and John Conyers (D-Mich.).

— Bernie Becker contributed

—Updated at 3:54 p.m.