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 WomackSteve WomackStudents across the country spend their 'summer recess' getting involved in politics After the balloons have fallen Obscure lawmaker thwarts Never Trump movement MORE (R-Ark.), Jackie Speier (D-Calif.), Peter WelchPeter WelchDem lawmakers: Clinton should have disclosed illness sooner Former Clinton adviser unsure of security protections on server Dems vow to keep heat on GOP over guns 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 DurbinDick DurbinDems gain upper hand on budget McConnell: Senate could drop flood money from spending bill Funding bill rejected as shutdown nears 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 EnziMike EnziOvernight Energy: Obama integrates climate change into national security planning Senate panel approves pension rescue for coal miners GOP pressures Kerry on Russia's use of Iranian airbase MORE (R-Wyo.), Lamar AlexanderLamar AlexanderOvernight Regulation: Lawsuits pile up against Obama overtime rule The American people are restive, discouraged and sometimes suicidal GOP chairman eyes lame-duck for passing medical cures bill MORE (R-Tenn.) and Heidi HeitkampHeidi HeitkampWells Fargo board to decide on executive clawbacks Week ahead: Funding fight dominates Congress Overnight Finance: McConnell offers 'clean' funding bill | Dems pan proposal | Flint aid, internet measure not included | More heat for Wells Fargo | New concerns on investor visas MORE (D-N.D.)