WASHINGTON - A bipartisan group of senators will introduce an amendment to the small-business tax credit bill this week that would require online retailers to collect sales taxes from out-of-state customers.
Sens. Dick Durbin, D-Ill., Mike Enzi, R-Wyo., Lamar Alexander, R-Tenn., and others filed the amendment Tuesday afternoon to the Small Business Jobs and Tax Relief Act, a bill introduced in March by Senate Majority Leader Harry Reid, D-Nev. that is expected to be voted on by the full Senate this week.
The amendment is a slightly modified version of the Marketplace Fairness Act, which was introduced by Enzi in 2011. The legislation offers states the option of collecting the sales taxes they are owed under current law from out-of-state businesses, rather than relying on consumers to pay those taxes to the states.
State and local groups, who have been pressing Congress for passage of an online sales tax bill, overwhelmingly praised the amendment.
"The local government community has had steadfast support for the Marketplace Fairness Act, and believe that a solution is long overdue for allowing local and state governments to collect taxes on remote sales," said Susan Gaffney, director of GFOA's federal liaison center. "We are hopeful that Congress will act soon to ensure that a level playing field is implemented and revenues owed to local governments are collected."
"Leveling the playing field with main street retailers is long overdue and we certainly appreciate the bill's authors looking for a vehicle for passage," said Lars Etzkorn, program director for federal relations for the National League of Cities.
Generally, states have been blocked from requiring Internet retailers overall to collect sales taxes by a 1992 Supreme Court decision in Quill Corp. v. North Dakota.
Christina Mulka, a spokesperson for Durbin, said there is broad bipartisan support for the Marketplace Fairness Act in Congress and among outside state and local government groups. She said Durbin and the other senators will push for a vote on the amendment.