Senate weighs support for taxing Internet sales

by Tim Devaney, The Washington Times  |  published on March 24, 2013

The Senate on Friday voted to give states greater power to collect sales taxes on purchases from sites like eBay and Amazon.

Sens. Dick Durbin, Illinois Democrat, and Mike Enzi, Wyoming Republican, tested the support for their bipartisan “Marketplace Fairness Act” with an amendment to the budget resolution, which passed 75-24, during Friday’s marathon voting session on the Senate floor.

In what has come to be known as the “Amazon tax,” the measure would require online retailers to collect sales tax, even on out-of-state purchases.

Online sales taxes are not new, but thus far, Internet retailers have been exempt from collecting it, much to the chagrin of their brick-and-mortar peers who enjoy no such exemption. Customers who shop online are supposed to pay the sales tax directly to the government, but many don’t realize this, so it goes uncollected.

Traditional retailers have lobbied strongly for the bill, because they say it would level the playing field, and state governments are backing it because they eye the revenues such taxes would bring in.

But opponents argue that states should not have the power to dictate to businesses outside of their jurisdiction, and that such taxes would pose a major crimp on Internet sales.

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