Lawmakers reintroduce online sales tax bills

Lawmakers reintroduce online sales tax bills
© Greg Nash

Bipartisan groups of lawmakers in the House and the Senate on Thursday reintroduced legislation that would make it easier for states to collect sales tax from online purchases.

“Folks shouldn’t have to pay a premium at the register just because they’re supporting a local business,” said Rep. Kristi Noem (R-S.D.), a lead sponsor of the House bill. “Unfortunately, the existing inequality means the deck is too often stacked against our Main Street retailers."

As a result of a 1992 Supreme Court decision, states are only allowed to require online retailers to collect sales tax if the businesses have a physical presence in the state. Customers are still required to pay taxes on the purchases, but in reality few do.


The bills would allow states to require out-of-state online retailers to collect their sales taxes, if the states simplify their tax laws.

An earlier version of the Senate bill passed the chamber in 2013. But efforts on online sales tax legislation have stalled in the past, in part because House Judiciary Committee Chairman Bob GoodlatteRobert (Bob) William GoodlatteNo documents? Hoping for legalization? Be wary of Joe Biden Press: Trump's final presidential pardon: himself USCIS chief Cuccinelli blames Paul Ryan for immigration inaction MORE (R-Va.), whose panel has jurisdiction over the matter, is interested in taking a different approach to the issue.

Sponsors of the bills argue that the legislation helps provide a level playing field for brick-and-mortar retailers. They also said state and local budgets are suffering due to their difficulties in collecting sales taxes from internet purchases.

Sen. Mike EnziMichael (Mike) Bradley EnziBottom line Chamber of Commerce endorses McSally for reelection Cynthia Lummis wins GOP Senate primary in Wyoming MORE (R-Wyo.), a lead sponsor of the Senate bill, said the measure "is about supporting jobs and services we have in our towns, while ensuring states have the ability to collect taxes they are owed, if they choose to.”

Retail groups also praised the reintroduction of the legislation.

"These important measures will fix an outdated tax loophole that currently gives online retailers a price advantage of up to 10 percent over brick-and-mortar stores, has shortchanged communities on much-needed sales tax revenue and overcomplicated our country’s current sales tax system," said Tom McGee, president and CEO of the International Council of Shopping Centers.

Other sponsors of the House bill include Reps. John Conyers (D-Mich.), Steve WomackStephen (Steve) Allen WomackOn The Money: Trump gambles with new stimulus strategy | Trump cannot block grand jury subpoena for his tax returns, court rules | Long-term jobless figures rise, underscoring economic pain Womack to replace Graves on Financial Services subcommittee Ex-CBO director calls for more than trillion in coronavirus stimulus spending MORE (R-Ark.) and Jason ChaffetzJason ChaffetzThe myth of the conservative bestseller Elijah Cummings, Democratic chairman and powerful Trump critic, dies at 68 House Oversight panel demands DeVos turn over personal email records MORE (R-Utah). In addition to Enzi, sponsors of the Senate bill include Sens. Dick DurbinRichard (Dick) Joseph DurbinThe Hill's Morning Report - Sponsored by Goldman Sachs - Tipping point week for Trump, Biden, Congress, voters Push to expand Supreme Court faces Democratic buzzsaw Progressive group: Feinstein must step down as top Democrat on Judiciary panel MORE (D-Ill.), Lamar AlexanderAndrew (Lamar) Lamar AlexanderOvernight Health Care: Trump takes criticism of Fauci to a new level | GOP Health Committee chairman defends Fauci | Birx confronted Pence about Atlas GOP Health Committee chairman defends Fauci amid Trump criticism Baldwin calls for Senate hearing on CDC response to meatpacking plant coronavirus outbreak MORE (R-Tenn.) and Heidi HeitkampMary (Heidi) Kathryn HeitkampThe Hill's Morning Report - Sponsored by JobsOhio - Showdown: Trump-Biden debate likely to be nasty Senate Democrats want to avoid Kavanaugh 2.0 Harris faces pivotal moment with Supreme Court battle MORE (D-N.D.).