Senate shows support for states taxing online sales

WASHINGTON Fri Mar 22, 2013 7:48pm EDT

U.S. President Barack Obama's motorcade is pictured as he moves from the White House to Capitol Hill in Washington, March 14, 2013, for meetings with Senate Republicans and House Democrats on the U.S. Budget. REUTERS/Jason Reed

U.S. President Barack Obama's motorcade is pictured as he moves from the White House to Capitol Hill in Washington, March 14, 2013, for meetings with Senate Republicans and House Democrats on the U.S. Budget.

Credit: Reuters/Jason Reed

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WASHINGTON (Reuters) - The Senate on Friday approved a mostly symbolic measure on Internet sales taxes and showed that legislation allowing states to tax businesses beyond their borders has strong bipartisan support in an often politically fractured Congress.

Senators from both parties, including Republican Lamar Alexander of Tennessee and Democrat Dick Durbin of Illinois, approved an amendment to the Senate's budget resolution that would clear the way for states to collect the so-called "Amazon tax."

The budget resolution, though, is non-binding and the tax could have to be addressed again in other legislation.

Still, the approval should reassure states and "bricks and mortar" retailers that Congress will come together to pass a bill soon.

There was some opposition. Before the vote, Senator Kelly Ayotte of New Hampshire, a Republican, and Senators Max Baucus of Montana and Ron Wyden of Oregon, Democrats, spoke out against it, saying it would hurt businesses in states without sales taxes.

In 1992 the Supreme Court decided the patchwork of state tax laws made it too difficult for online retailers to collect and remit sales taxes. Currently, states can only tax Internet sales made by companies with a physical presence within their borders. In practice, that means online retailers such as Inc charge sales tax in some states and not in others.

Large Internet retailers are worried the tax could drive up the cost of doing business. They would also have to create new systems and software to collect the surcharges, adding to their costs. Amazon said in July it prefers having the tax issue resolved at the federal level.

When the 2007-09 recession caused states' revenues to collapse, both Republican and Democratic governors advocated for the tax as a financial solution that would not require the federal government to provide direct aid.

Last month both chambers took up identical bills on the tax.

(Reporting by Lisa Lambert; Editing by Richard Chang)

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Comments (2)
usagadfly wrote:
Figures. The Congress simply cannot do anything right. So go out to wreck about the only industry that has not offshored yet by taxing it, while continuing to allow the “carried interest” fraud by the rich! The States tax too much already, and all US Government taxes beyond its borders too much. It is the weakest tax practice the US does and it is one of only two countries on the planet that does.

This is a clear sign of the totally dysfunctional American representation and election system. No more corporate donations. No more winner take all elections. No more lifetime Judges (“American Lords”). No more imperial military. No more taxation of foreign income. No more subsidies for multi-national corporations. No more subsidies for corporations that export jobs or import workers. No more wars. No more allowing foreigners in our Government. No more foreign meddling in US politics.

Try those instead of taxing internet sales.

Mar 23, 2013 10:38am EDT  --  Report as abuse
JL4 wrote:
And not one word in this article about how this tax will be added onto each individual purchase by the consumer, and how that might affect us. This article focuses only on how confusing, difficult, and expensive it will be for businesses to comply.

I guess only businesses are people now.

Mar 23, 2013 2:16pm EDT  --  Report as abuse
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