In many states, shoppers are required to pay unpaid sales taxes when they file state tax returns. But governors complain that few people comply.
The Senate voted 63-30 Thursday to end debate on the bill, though senators delayed a final vote on passage until May 6, when they return from a weeklong vacation. Opponents hope senators hear from angry constituents over the next week, but they acknowledged they have a steep hill to climb to defeat the bill in the Senate.
President Barack Obama supports the bill.
Senate Democratic leaders wanted to finish work on the bill this week, before leaving town for the recess. But they were blocked by a handful of senators from states without sales taxes.
Oregon, Montana, New Hampshire and Delaware have no sales taxes, though the two senators from Delaware support the bill.
“I think it’s going to be interesting for senators to get a response from constituents over this upcoming week,” said Sen. Ron Wyden, D-Ore. “I’m not sure that the country knows that something like this coerces businesses all around America to collect other people’s sales taxes.”
The bill pits brick-and-mortar stores like Wal-Mart against online services such as eBay. The National Retail Federation supports it. And Amazon.com, which initially fought efforts in some states to make it collect sales taxes, supports it, too.
Supporters say the bill is about fairness for local businesses that already collect sales taxes and for states that lose revenue. Opponents say the bill would impose complicated regulations on retailers and doesn’t have enough protections for small businesses. Businesses with less than $1 million a year in online sales would be exempt.
Many of the nation’s governors — Republicans and Democrats — have been lobbying the federal government for years for the authority to collect sales taxes from online sales.
The issue is getting bigger for states as more people make purchases online. Last year, Internet sales in the U.S. totaled $226 billion, up nearly 16 percent from the previous year, according to Commerce Department estimates.
The National Conference of State Legislatures estimates that states lost $23 billion last year because they couldn’t collect taxes on out-of-state sales.