Multistate – Internet Sales Tax Bill Blocked by Opposing Senators

SALT Report 2410 – A few Senators from states that do not have sales tax have collectively blocked a bill that would impose sales and use tax on Internet purchases. Although these Senators do not have enough support to kill the bill, they certainly have the power to delay the final vote.

The Bill’s primary opposition is coming from three states that do not impose sales taxes: New Hampshire, Montana and Oregon. Senator Ron Wyden, D-Ore, says the bill is, “Coercive, as it requires a number of states to collect the taxes of other states thousands of miles away, against their will. It’s discriminatory because this forces some people online to carry out responsibilities that even brick and mortar retailers do not have to.” Senator Jeff Merkley, D-Ore, said, “We don’t like the idea of other states auditing our businesses and they don’t like the idea of being subject to both bureaucrats and potential legal action.”

These Senators are not alone in their opposition as some of the most powerful anti-tax advocacy groups are also fighting to block the Marketplace Fairness Act. Grover Norquist, president of Americans for Tax Reform, warns that if passed, the bill would set a “precedent for further expansions of state-level tax collection authority.”

In an effort to push the Bill along, Senate Majority Leader Harry Reid threatened that he will hold a vote shortly after midnight Friday morning to end the debate if the Senate cannot reach an agreement to vote. And, as of late Thursday night, the Senate voted 63-30 to end the debate, and have agreed to delay a final vote until May 6, when they return from their week-long vacation.