House chairman: Internet sales tax bill has ‘a long way to go’

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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 out-of-state online retailers but would exempt small businesses that earn less than $1 million annually. Supporters argue the bill would close an unfair loophole that benefits online retailers over their brick-and-mortar competitors.

But Goodlatte said the Senate's version of the legislation is too complicated.

“While it attempts to make tax collection simpler, it still has a long way to go," the Judiciary Committee chairman said. "There is still not uniformity on definitions and tax rates, so businesses would still be forced to wade through potentially hundreds of tax rates and a host of different tax codes and definitions."

He also expressed concern that the bill "could open the door for states to tax or even regulate beyond their borders."

"I am open to considering legislation concerning this topic but these issues, along with others, would certainly have to be addressed," Goodlatte said. "The committee will also look at alternatives that could enable states to collect sales tax revenues without opening the door to aggressive state action against out-of-state companies.”

The sponsors of the Marketplace Fairness Act 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.).

“I am proud to have joined sixty-nine of my Senate colleagues from both sides of the aisle in passing this long-overdue legislation that will give much needed support to local businesses around the country,” Sen. 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.), a lead co-sponsor, said in a statement after the Senate approved the legislation. 

"A solid majority of the Senate stood up for small business today. I think the support in the House will be similar if the leadership practices what they preach and calls this bill for a vote.”

The other lead supporters of the Senate bill were Sens. 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.), 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.) and Heidi HeitkampMary (Heidi) Kathryn HeitkampThe Hill's 12:30 Report Avalanche of Democratic senators say Franken should resign Senate panel moves forward with bill to roll back Dodd-Frank MORE (D-N.D.)