Internet retailers bash Senate attempt to 'sneak through' online sales tax

By Bernie Becker - 03/20/13 02:26 PM ET

Opponents of an online sales tax measure are pushing back on efforts to get the bill added to the Senate budget this week.

Phil Bond, the executive director of the WE R HERE coalition, accused backers of online sales tax measures of trying to “sneak through” their legislation outside regular congressional order.

“There are good reasons this policy hasn’t been considered in the US Senate for over a decade: Taxpayers don’t like it, it turns the Internet into a tax collection platform, it allows state tax collectors to exercise authority far beyond their boundaries and it will put thousands of small businesses out of business,” Bond, a top Commerce Department official under George W. Bush, said in a statement.

Groups like the National Retail Federation and the Retail Industry Leaders Association, strong backers of the online sales tax measure, have been urging supportive senators to offer the bill as an amendment to the Senate budget.

Senate Majority Whip Dick Durbin (D-Ill.) and Sen. Mike Enzi (R-Wyo.) have signaled that they are considering offering their proposal as a budget amendment. Even though the Senate budget won’t become law, supporters say garnering the needed 60 votes for the online sales tax measure would show momentum is on their side.

Under current law, states are only obligated to collect sales taxes from retailers that currently reside within their borders.

Retail groups say this gives Internet sellers an unfair advantage over brick-and-mortar shops. The legislation introduced this year, which melds previous House and Senate proposals, would allow states to collect from Internet sellers that don’t reside in their state.

The large online retailer Amazon, currently spreading into an increasing number of states, also backs the legislation.

But conservatives like Grover Norquist have said they don’t like the proposal, and eBay and other online retailers that oppose the measure say they are making the case that the bill favors large companies over smaller start-ups.

Backers of an online sales tax measure pushed to get a bill passed during last year’s lame-duck session, but fell short. And while supporters are confident they have the support to get a bill enacted, key committee chairmen have said they’re skeptical of the measure.