Coalition looks to battle online sales tax

Jerry Cerasale, a vice president for the Direct Marketing Association, said an online tax would "throttle new businesses before they even get off the ground.”

“There are more than 9,600 taxing jurisdictions in the US today,” he explained in a statement. “Requiring that any business — particularly a new one — be prepared to comply with the rules in all of those jurisdictions in order to do business across state lines is a precipitously high barrier and a very costly one."

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 purchase on their tax forms, but few do. 

A bipartisan group of senators is pushing an online tax bill, and the House Judiciary Committee will hold a hearing on Tuesday to consider counterpart legislation. The bills would exempt small businesses from online taxes.

Supporters say failing to tax online purchases is an unfair loophole that puts traditional retailers at a disadvantage. But TruST argues the measure would stifle Internet commerce and destroy jobs.