Finance

Durbin: Online sales tax ‘up to the House’

A senior Senate Democrat said Thursday that the House would determine whether online sales tax legislation would proceed this year, all but ensuring that the measure wouldn’t become law in 2014.

{mosads}“At this point, it’s up to the House,” Senate Majority Whip Dick Durbin, a backer of the Marketplace Fairness Act, told reporters.

Speaker John Boehner (R-Ohio) already vowed this month to block the online bill from consideration in the House, crippling supporters’ chances of finally getting the measure to President Obama’s desk.

Backers of the measure have been seeking to pair the Marketplace Fairness Act with a less controversial bill that would extend a moratorium on taxes on Internet access. That law, known as the Internet Tax Freedom Act, expires on Dec. 11, along with the current stopgap government funding bill.

But Durbin said Thursday that it made little sense for the Senate to try to force the House’s hand by bringing the online sales tax bill back to the floor, after it overwhelmingly passed the Senate in May 2013. Still, Durbin also had some choice words for Boehner in the process.

“I think it’s important for the House to understand that the Speaker’s position is unfair. Again, another measure passed overwhelmingly by the Senate that he refuses to call,” Durbin said. “The Speaker, as a member of the party of business, should listen to business.”

Under current law, states aren’t allowed to collect sales taxes from businesses that don’t have a physical presence within their borders.

Retail groups, large retailers and even the online giant Amazon, which has expanded into many states, believe that set-up gives online businesses an unfair advantage. The Marketplace Fairness Act would correct that imbalance, supporters say, by giving states more freedom to collect sales taxes from out-of-state retailers – taxes that are generally already owed, but rarely paid. 

Opponents of the bill, like Sens. Ted Cruz (R-Texas) and Rand Paul (R-Ky.), argue that the measure would still serve as a tax increase on consumers and would hurt small online retailers as it helped the big box stores.

Supporters of the bill also said this week that they would keep fighting to get the online sales tax bill passed this year, with the National Retail Federation sponsoring a legislative fly-in when Congress returns to Washington after Thanksgiving.

But with a bill having already made it through the Senate — a first for supporters, after a dozen years of trying — backers also acknowledged that the current lame-duck session might be the last, best chance for getting the bill into law.

Tags Boehner Dick Durbin John Boehner Rand Paul Ted Cruz
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