Despite Years of Protest, Passage of the Internet Sales Tax Suddenly Seems Imminent
An overwhelming majority of Senators just voted to cut the debate short and get a final vote on a controversial bill that will impose sales tax on purchases made on the Internet. Though support to move the so-called Marketplace Fairness Act forward jumped from less than 60 senators to 74 who voted to limit debate on Monday, the pro-Internet crew has a tough row to hoe. But based on the industry Goliaths at their back, companies like Wal-Mart and Amazon, and the recent change of heart by so many lawmakers, the bill looks like it stands a pretty good chance of making it to the president's desk. It helps that the Obama administration announced not long before the vote on Monday that it supports the curent version of the bill.
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But just because the bill suddenly has a lot of support from very powerful people, doesn't mean it's without opposition. Opponents of the bill include everyone from eBay, the Internet auction giant that's been mobilizing its millions of users against the bill, to Grover Norquists Americans for Tax Reform, a powerful anti-tax lobby with obvious libertarian leanings. After Monday's change of heart in the Senate, those groups turned their gaze to the House, where there's still some hope if not to stop the bill than to amend it so that's not so sweeping.
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The bill isn't really all that sweeping in its current form, though. There are some failsafes to protect small business, like a rule that only requires an online retailer to collect tax if they bring in less than $1 million in revenue. (The Marketplace Fairness Act, meanwhile, would bring an estimated $22 billion to $24 billion in new tax revenue.) These are the same business, the White House says, will benefit most from the bill since it "will level the playing field for local small business retailers who are undercut every day by out-of-state on-line companies." The National Governors Association, who favors the bill, similarly said that the current structure is favoring online retails and, as a result, "shuttering stores and undermining state budgets."
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Opponents beg to differ, but some are willing to meet half way. During the Senate's abbreviated debate on the bill, there are plans to introduce a three-word amendment that would limit the bill's reach to Internet sellers "in participating states." So if New Hampshire, the "Live Free or Die" state, doesn't want to impose a new tax, it doesn't have to. Regardless of what happens in the interim, the gist of this bill feels imminent. Jordan Weissman at The Atlantic calls it "common sense," and apparently, a growing group of lawmakers agree.
