Small Business News

Online Sales Tax To Be Voted On In May

The Senate really wants the public to know that it’s completely behind the Marketplace Fairness Act, a bill that would require online businesses to collect sales tax from every state regardless of its location.

After two previous votes that saw the legislation move forward, the Senate voted one final time in favor of ending the debate on the bill. The 63-30 vote ensures that the bill will finally move to a final vote on the Senate floor. That vote won’t come for another week, however, as the Senate also agreed to delay the vote until after they return from a weeklong recess on May 6.

The Hill notes that support for the bill has dropped considerably as the Senate has rejected an open amendment process. Many senators who would be in favor of an online sales tax bill are now opposed for this very reason. That doesn’t mean that the bill will suddenly be stopped in its tracks, however, as a number of influential Senators and the White House both stand in favor of the bill’s passage.

The Marketplace Fairness Act will most likely pass a floor vote in the Senate on May 6, but the bill still has a very uncertain future. The House is hostile to any legislation that would increase taxes. The bill’s supporters will likely have to make a few compromises in the House to see it passed.

One of those compromises, suggested by Sen. Ron Wyden, may very well show up in the House. Wyden argued that states should be able to opt out of collecting online sales tax from retailers. The argument is that states sales tax should be decided by the states, and that the federal government has no right to force states into collecting sales tax.

That being said, states seem to have no problem with the legislation as many governors have voiced support for the bill. States feel that they are losing out on billions of dollars in tax revenue ever year in untaxed online revenue.

We’ll continue to follow the Marketplace Fairness Act as it heads for a final floor vote on May 6. Don’t expect any major surprises out of the Senate, but we’ll keep an eye on it just in case.

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