HOW THEY VOTED
To require most businesses to collect sales taxes on products sold online, in catalogs and through radio or TV ads.
Johnny Isakson (R) Y
Saxby Chambliss (R) Y
HOW THEY VOTED
To require most businesses to collect sales taxes on products sold online, in catalogs and through radio or TV ads.
John Cornyn (R) NV
Ted Cruz (R) N
HOW THEY VOTED
To require most businesses to collect sales taxes on products sold online, in catalogs and through radio or TV ads.
Sherrod Brown (D) Y
Rob Portman (R) Y
HOW THEY VOTED
To require most businesses to collect sales taxes on products sold online, in catalogs and through radio or TV ads.
Bill Nelson (D) Y
Marco Rubio (R) N
OHIO ANGLE
The National Conference of State Legislatures estimates Ohio lost $628.6 million in potential revenues in 2012 because of the prohibition against collecting sale taxes on purchases from retailers without a physical presence in the state.
FLORIDA ANGLE
The National Conference of State Legislatures estimates Florida lost $1.5 billion in potential revenues in 2012 because of the prohibition against collecting sale taxes from retailers without a physical presence in the state.
GEORGIA ANGLE
The National Conference of State Legislatures estimates Georgia lost $837.6 million in potential revenues in 2012 because of the prohibition against collecting sale taxes from retailers without a physical presence in the state.
TEXAS ANGLE
The National Conference of State Legislatures estimates Texas lost $1.8 billion in potential revenues in 2012 because of the prohibition against collecting sale taxes from retailers without a physical presence in the state.
A bill that aims to help traditional retailers and financially strapped state and local governments by allowing them to collect sales tax on most online purchases received Senate approval Monday.
The Senate passed the bill by a vote of 69 to 27, getting support from Republicans and Democrats alike. But opposition from conservatives who view it as a tax increase will make it a tougher sell in the House, where it would have to win passage before becoming law.
President Barack Obama has conveyed his support for the measure.
Under current law, states can only require retailers to collect sales taxes if the store has a physical presence in the state.
That means big retailers with stores all over the country like Wal-Mart, Best Buy and Target collect sales taxes when they sell goods over the Internet. But online retailers like eBay and Amazon don’t have to collect sales taxes, except in states where they have offices or distribution centers.
As a result, many online sales are tax-free, giving Internet retailers an advantage over brick-and-mortar stores.
“We ought to have a structure in place in the states that treats all retail the same,” said Matthew Shay, president and CEO of the National Retail Federation. “Small retailers are collecting (sales tax) on the first dollar of any sale they make, and it’s only fair that other retailers who are selling to those same customers the same product have those same obligations.”
The bill would empower states to require businesses to collect taxes for products they sell on the Internet, in catalogs and through radio and TV ads. Under the legislation, the sales taxes would be sent to the state where the shopper lives.
Supporters say the current tax disparity is turning some traditional stores into showrooms, where shoppers pick out items they like, then buy them on the Internet to avoid sales taxes.
“It’s about the way commerce has changed in America,” said Sen. Dick Durbin, D-Ill. “Bookstores, stores that sell running shoes, bicycles and appliances are at a distinct disadvantage.”
Internet giant eBay is leading the fight against the bill, along with lawmakers from states with no sales tax and several prominent anti-tax groups. The bill’s opponents say it would put an expensive obligation on small businesses because they are not as equipped as national merchandisers to collect and remit sales taxes at the multitude of state rates.
“Giant retailers have a requirement to collect sales taxes nationwide because they have physical presence nationwide,” eBay president John Donahoe wrote in an online column over the weekend. “Likewise, today small retail stores and online retailers collect sales taxes for the one state where they are located. That’s a fair requirement.
“If the bill passes, small online businesses would have the same tax compliance obligations and face the same enforcement risks as giant retailers, despite the fact that they are usually located in just one state.”
Businesses with less than $1 million in online sales would be exempt. EBay wants to exempt businesses with up to $10 million in sales or fewer than 50 employees.
In many states, shoppers are already required to make up for unpaid sales tax when they file their state income tax returns. However, states complain that few taxpayers comply.
Many 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 government estimates.
States lost a total of $23 billion last year because they couldn’t collect taxes on out-of-state sales, according to a study done for the National Conference of State Legislatures, which has lobbied for the bill. About half of that was lost from Internet sales; half from purchases made through catalogs, mail orders and telephone orders, the study said.
Supporters say the bill makes it relatively easy for Internet retailers to comply. States must provide free computer software to help retailers calculate sales taxes, based on where shoppers live. States must also establish a single entity to receive Internet sales tax revenue so retailers don’t have to send it to individual counties or cities.
Opponents worry the bill would give states too much power to reach across state lines to enforce their tax laws. States could audit out-of-state businesses, impose liens on their property and, ultimately, sue them in state court.
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