Online sales tax bill set for vote in the Senate

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.) has moved to bring online sales tax legislation to the Senate floor, likely setting up a vote for early next week.

On Thursday, he filed to end debate on the bill, which is known as the Marketplace Fairness Act.

The move skips over the Senate Finance Committee, which has jurisdiction over the issue but has not held any votes or hearings on the bill this session.

Finance Committee Chairman Max BaucusMax BaucusLawmakers: Leave advertising tax break alone GOP: FBI firing won't slow agenda White House tax-reform push is ‘game changer,’ says ex-chairman MORE (D-Mont.) has insisted that the bill should go through his committee. He has expressed concern with the bill but said he would be willing to consider it as part of negotiations over broader tax reform.

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“Harry Reid is hell-bent on bringing it to the floor, bypassing the committee,” Sen. Orrin HatchOrrin HatchOvernight Regulation: Biz groups push to scrap rule on reporting employee pay | GOP skeptical of Trump paid leave plan GOP skeptical of Trump plan for paid parental leave GOP talks of narrowing ‘blue-slip’ rule for judges MORE (R-Utah), the Finance Committee's ranking member, said on Thursday. “I don’t think it’s the right way to do things, especially on something that important. And we’ll just have to see what happens.”

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 lead sponsors are Sens. Dick DurbinDick DurbinThe GOP must fight against the Durbin amendment's price controls It’s time to rethink prisoner re-entry Congress urges Trump administration to release public transit funding MORE (D-Ill.), Mike EnziMike EnziFive takeaways from Trump's first budget proposal Eliminate Foreign Investment in Real Property Tax Act of 1980 to create jobs Trump releases budget that slashes government programs MORE (R-Wyo.) and Lamar AlexanderLamar AlexanderRepublicans give Trump's budget the cold shoulder Senate GOP short on ideas for stabilizing ObamaCare markets GOP senators push Trump for DOE research funding MORE (R-Tenn.).

They argue the bill 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.

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.

Reps. 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.), Jackie Speier (D-Calif.), Peter WelchPeter WelchFive roadblocks for Trump’s T infrastructure plan Hopes of bipartisanship fade amid Comey chaos Trump to continue paying ObamaCare subsidies MORE (D-Vt.) and John Conyers (D-Mich.) have introduced companion legislation in the House, but the chamber is likely to move more slowly than the Senate. The House bill will head to the Judiciary Committee, which has yet to schedule a hearing on the issue.