Senate Majority Leader Harry Reid, D-Nev., filed a motion this week to skip the Senate Finance Committee and take the online sales tax bill directly to the full Senate, which would vote on the measure as early as next week.
The Marketplace Fairness Act, S.336, was originally introduced by Sen. Mike Enzi, R-Wyo., on Feb. 14. The bill would allow states to collect taxes from online retailers and catalogs. For years brick-and-mortar businesses have complained they are at a disadvantage because they have to collect taxes while online retailers who don’t have a physical presence in a state are exempt.
Under the MFA, states would be required to simplify sales tax administration. The bill includes an exemption for remote sellers who make less than $1 million a year.
The bill has been pending before the Senate Finance Committee and was brought up as an amendment to the Senate’s fiscal 2014 budget resolution. The amendment passed with a vote of 75-24, but was a nonbinding provision.
Earlier this week Enzi reintroduced the bill which was then placed on the Senate legislative calendar and allowed it to bypass the Finance Committee, where it hasn’t received a warm welcome.
Sen. Max Baucus, D-Mont., chairman of the committee, expressed reservations about the bill and voted against the March nonbinding provision, leaving it uncertain as to when it would ever be called up for a vote.
Baucus said the bill was bad for Montana businesses and all small businesses around the country. Montana is one of five states that does not have a sales tax.
Sen. Orrin Hatch, R-Utah., the finance committee ranking minority member also opposed the amendment, calling it “controversial” and one that raises concerns with many stakeholders.
With the possibility that the Senate will vote on a standalone bill next week, supporters are hopeful it will become law. Rachelle Bernstein, vice president and tax counsel with the National Retail Federation, is hopeful that the bill will be approved, like the nonbinding resolution.
“We are very pleased that it will come up,” Bernstein said. “This legislation has been around for years and years. The reason that there is recognition is because the growth of internet sales is so much greater than it has ever been. It really needs to be done.”
