The movement to bring State sales tax across the board to Internet retailers got an important endorsement this week as President Barack Obama "enthusiasticlly endorsed" the efforts by Senator Harry Reid (D-NEVADA) to push the Marketplace Fairness Act forward at a breakneck pace – according to The Hill. Senators advanced the bill in a 74-20 procedural vote on Monday evening, one vote less than it received in a test vote last month. Twenty-six Republicans joined Democrats in moving forward with the bill. The Senate will now begin the debate on amendments, with a full vote happening later in the week.
"We have heard overwhelmingly from governors, mayors and the business community on the need for federal legislation to level the playing field for our businesses and address sales tax fairness," White House press secretary Jay Carney said.
The legislation, backed by the National Retail Federation (who has long sought to "even the playing field" on sales tax which online retailers have enjoyed and brick and mortar retailers can not avoid), would allow states to tax online purchases.
But not everyone is so enthusiastic about the new plan to bring taxes to online retailers:eBay is asking its customers to let the Senate know they don't like the idea of adding taxes to their online purchases, and the Securities Industry and Financial Markets Association and the Financial Services Roundtable said that the measure could pave the way for financial transaction taxes on the state level, an idea that scares Wall Street.
"It’s important for Congress to explore all the possible outcomes and costs of the proposal, especially the impact on consumers," Scott Talbott, the senior vice president of public policy for the Roundtable, said in a statement. "A transaction tax on financial services products will hurt retail investors, retired Americans, and small businesses, effectively making it more expensive for them to invest and plan for the long-term. Without hearings, these implications and others will not be properly addressed."
The proposal has the support of a host of governors, including Republicans Chris Christie of New Jersey, Rick Snyder of Michigan and Bob McDonnell of Virginia, according to The Hill.
Some Senators are asking Harry Reid to slow down on this bill including Sens. Kelly Ayotte (R-N.H.), Ron Wyden (D-Ore.), Jon Tester (D-Mont.), Jeanne Shaheen (D-N.H.), Marco Rubio (R-Fla), Mike Lee (R-Utah) and Ted Cruz (R-Texas). They sent a letter to Reid on Monday urging him to delay the legislation. They warned the Senator that the bill would “erode” states’ rights and “result in crippling compliance costs on small Internet businesses.”
"At the very minimum, we believe these concerns warrant a thorough vetting of the bill through regular order," they wrote.
Sen. Max Baucus (D-Mont.), the chairman of the Finance Committee, criticized Reid for bypassing his committee, which has jurisdiction over taxes.
"This bill is not ready for debate on the Senate floor. It has not been completely thought through. It is full of unintended consequences that could seriously harm America’s small businesses," Baucus said.
Sens. Dick Durbin (D-Ill.), Lamar Alexander (R-Tenn.) and Mike Enzi (R-Wyo.) are Senate co-sponsors of the legislation.
Source: The Hill