Internet Sales Tax Bill Goes to Conservative House

Washington, DC, May 7, 2013 -- Although the Senate voted overwhelmingly to pass a bill to empower states to collect sales taxes from Internet purchases, the bill faces a much more uncertain future in the House.

The Senate voted 69 to 27 Monday for the Marketplace Fairness Act, allowing states to require out-of-state retailers to collect sales taxes from Internet and catalog transactions.

The bill has been heavily pushed by groups like the World Floor Covering Association.

Today, states can only require retailers to collect sales taxes if the merchant has a physical presence in the state, like a store or warehouse.

However, anti-tax advocate Grover Norquist, along with conservative think tanks like the Heritage Foundation, oppose the legislation, and many Republicans are hesitant to oppose them.

In addition, the complexity of dealing with hundreds of different sales tax rates has given some legislators pause.

Businesses with less than $1 million in online sales would be exempt.