WASHINGTON (AP) — The Senate is debating a bill that would allow states to collect sales taxes from Internet purchases.
Under current law, states can only require stores to collect sales taxes if the store has a physical presence in the state. As a result, many online sales are essentially tax-free, giving Internet retailers a big advantage over brick-and-mortar stores.
The bill would allow states to require online retailers to collect state and local sales taxes for purchases made over the Internet. The sales taxes would be sent to the states where shopper lives.
The Senate has scheduled a procedural vote Monday on the bill. It is expected to pass, setting up a vote on the floor as early as this week.
Supporters say the bill is about fairness for businesses and lost revenue for states. Opponents say it would impose complicated regulations on retailers and doesn’t have enough protections for small businesses. Businesses with less than $1 million a year in online sales would be exempt.
“I believe it is important to level the playing field for all retailers,” said Sen. Mike Enzi, R-Wyo., the bill’s main sponsor. “We should not be subsidizing some taxpayers at the expense of others.”
In many states, shoppers are required to pay unpaid sales tax when they file their state income tax returns. However, states complain that few people comply.
“I do know about three people that comply with that,” Enzi said.