Democrats and Republicans in the Senate seem to agree that requiring online retailers to collect sales tax is a great idea. A bipartisan coalition from both parties easily passed the Marketplace Fairness Act by a vote of 69-to-27. The bill was sponsored by Senator Harry Reid (D-Nevada) who fast-tracked the bill and avoided any committee that might have had oversight over the bill. The bill is a dream come true for traditional brick-and-mortar retailers who have long complained that internet retailers have an advantage over them because they generally don't have to collect sales tax from their customers.
But not everyone is so keen on this bill and its future remains uncertain as the House – dominated by Republicans – will likely put the kibosh on it getting to the President's desk. It also doesn't help that the one man a lot of Republicans listen to – Grover Norquist from Americans for Tax Reform – strongly opposes the bill. Last month representatives from his group warned lawmakers that passing this bill would violate any pledge they made to not raise taxes. They see this bill as a tax increase on Americans and strongly oppose it. Republicans in the House that are thinking about voting for it can expect some opposition from the group when they seek re-election.
On the other side of the fence, retailers are piling into cars, planes and buses to head to Washington this week to convince lawmakers that bills like the one being sponsored by Representative Steve Womack (R-Arkansas) are a good idea. It's a tough sell.
We will continue to follow this story as it develops.