U.S. Senate Votes in Favor of Levying Internet Sales Taxes

Some senators argued that implementing an Internet sales tax would be harmful to taxpayers, would be anti-business and would create a “bureaucratic nightmare.” Nonetheless, endorsement of Internet sales taxes onto a Democratic budget bill passed easily in the Senate last week by a 75 to 24 margin. The adopted amendment allows states to “collect taxes on remote sales,” ushering in the first national Internet sales tax.

Senator Dick Durbin of Illinois said the vote to levy Internet sales taxes is “one that is long overdue.”

The vote came after a week “of fierce lobbying from the National Retail Federation and the Retail Industry Leaders Association, which represent companies including Walmart, Target, AutoZone, Best Buy, Home Depot, OfficeMax, Macy’s, and the Container Store,” reports CNET. They argue that online retailers have an unfair competitive advantage over brick-and-mortar stores that are forced to carry a sales tax.

“We believe this is the fair thing to do,” said Durbin. “Otherwise they’re competing against retailers who don’t collect.”

But in some states, like Montana, this presents a difficult challenge because the state has no sales tax. Thus, Montana businesses selling via the Internet to other states will have to “collect and enforce” those other states’ sales tax.

Those in opposition claim the amendment equals a multibillion dollar tax hike on American consumers. “The National Taxpayers Union set up a petition to Congress this week saying Enzi’s bill is ‘really just a way to unleash state tax collectors on the Internet’ and 15 conservative groups sent a letter last week to members of Congress saying an Internet tax law is ‘is bad news for conservative principles and the cause of limited government,’” according to the article.