The Congressional Budget Office has scored the online sales tax bill pending in the Senate and found it would have not have any impact on the federal budget or impose costs on state, local or tribal governments.
The Marketplace Fairness Act would allow states to require certain sellers that are not physically located in the state to collect taxes on sales to individuals who reside in the state. The requirement to collect taxes under the MFA would not apply to sellers that make a total of $1 million or less annually.
CBO said the bill, S. 743, would not have an impact on the federal budget because the measure “would not affect direct spending or revenues” and therefore “pay-as-you-go procedures do not apply.”
On Monday, the legislation passed its first hurdle when Senators voted 74-20 to limit debate on the bill. Last month 75 Senators voted to add it as an amendment to the Senate’s fiscal 2014 budget resolution, but that was a nonbinding resolution.
The bill, which has the support of the Obama administration, state and local groups, and several large retailers including Amazon.com, has pitted Republicans and Democrats against each other.
Senate Finance Committee chairman Max Baucus, D-Mont., opposes the bill because he says it would be an added tax for small businesses in Montana, which is one of five states that currently has no sales tax.
Sen. Kelly Ayotte, R-N.H., has been one of the most vocal critics of the bill and said it “tramples” on New Hampshire’s decision not to have a sales tax.
But co-sponsor of the bill Sen. Mike Enzi, R-Wyo. said at a press conference Wednesday, “We’re not raising a tax, that tax is already owed. If you buy something out of state and you don’t pay the sales tax on it, you are supposed to file that with your state and pay the tax. Difficult to do and people don’t comply with that.”
A final vote on the online sales tax bill is expected later this week in the Senate.