Monday, October 6, 2014

Congress to push Internet sales tax after midterm elections

Greg Nash
Lawmakers have set up a lame-duck showdown over a long-stalled issue: whether to give states more authority to tax Internet sales.
Senate Majority Leader Harry Reid (D-Nev.) put the online sales tax legislation at the top of his priority list, when he shared his post-November to-do list before leaving Washington to campaign. 
“That is long, long overdue,” Reid said of the online sales tax bill, known as the Marketplace Fairness Act (MFA). 
He said he’d do “whatever it takes to get that done.”
Supporters have seen their efforts fall short before. But they believe they’ve found the perfect vehicle for getting a bill across the finish line this year — linking it to an extension of a widely supported law that bars local taxes on Internet access, the Internet Tax Freedom Act (ITFA).
Lawmakers extended the moratorium on Internet access taxes, which was scheduled to expire on Nov. 1, until mid-December in the stopgap spending measure they passed last week.
The short-term spending bill expires on Dec. 11, giving supporters a chance to pair the Marketplace Fairness Act with a longer extension of the online tax moratorium.
The lame-duck session is poised to be crucial for both sides.
If the online sales tax bill doesn’t become law this year, supporters will have to restart the legislative process in 2015 — after watching the Senate pass a version of the Marketplace Fairness Act in the first part of last year.
Opponents of the bill — including prominent GOP lawmakers and conservative organizations — are also ready for a fight, acknowledging that online sales tax advocates have found a viable vehicle with the Internet Tax Freedom Act.
Both sides are also grappling with the uncertain political atmosphere they will face after November’s elections, with control of the Senate in January still up for grabs.
At issue is a bill that would allow states to collect sales tax revenue from online retailers outside their borders. Right now, states can only collect sales taxes from a business with a physical location in that state.