Senate Votes in Support of Online Sales Tax

On March 22, the United States Senate overwhelmingly voted in support of the Marketplace Fairness Act, a bill that would require online companies to collect sales tax.

The vote was 75 to 24. Click here for a roundup of how Senators voted

The vote doesn’t mean the bill has passed the Senate, as the Senators didn’t vote for an actual bill, but for “a non-binding resolution [that] does not have the force of law,” says Christina Mulka, deputy communications director for Richard Durbin (D-Ill.), one of the bill’s sponsors. She says the vote should be “seen as a symbolic show of support and proof that [the bill] has the needed 60 votes to pass the Senate.” 

“In order for it to become law, the Marketplace Fairness Act would have to be voted on again as a standalone bill or as part of a larger piece of legislation in both the Senate and the House,” and then signed by the President, Mulka adds.

The bill—text of which can be seen here—would let states collect sales and taxes from “remote sellers,” provided the states simplify their sales tax laws. The legislation includes a “small seller exemption,” which says that sellers who do less than $1 million in “remote sales” a year do not have to collect sales tax.

The vote was hailed by groups that support the measure, including Jewelers of America, the National Retail Federation, the Retail Industry Leaders Association, and the International Council of Shopping Centers.

“This is a key moment in the fight for sales tax fairness,” says Jewelers of America president and CEO David J. Bonaparte. “The overwhelming support for the Marketplace Fairness Act amendment in the Senate demonstrates that the scales have begun to tip in favor of fairness. We hope to see further action by Congress.”

However, NetChoice, an e-commerce trade association whose members include eBay and Yahoo, slammed the bill’s sponsors for including it on a procedural vote.

“Levying a new tax on Internet sales deserves an honest conversation about the real impact on businesses across the country,” said Steve DelBianco, executive director of NetChoice, in a statement. “It seems that every day more folks are sounding the alarm over the added complexity, costs, and inequality that the Marketplace Fairness Act will impose.”


JCK News Director