Senate Votes In Favor Of Online Sales Tax Bill, Controversial Legislation Heads To House

IT Management

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The Marketplace Fairness Act - a piece of legislation that will force online businesses to collect state sales tax regardless of their physical location - was set to go before the Senate for a final vote last night. It was expected to pass, and the Senate did not disappoint.

The Hill reports that the Senate approved the Marketplace Fairness Act by a wide margin (69-27) with plenty of bi-partisan support. The passage was met with applause from retail organizations, including the National Retail Federation. The organization's president and CEO Matthew Shay said that passage in the Senate is a "significant step for sales tax fairness."

Now the bill must go before the House where it is expected to meet far more resistance from representatives opposed to any new tax legislation. Anti-taxation groups and small online businesses will also be doubling their efforts in the House to ensure that the bill doesn't pass, or that it at least contains some protective measures to ensure small businesses aren't hurt by it.

Despite these challenges, the NRF says it's not worried. In a statement, Shay said that he's looking forward to working with the House to ensure the bill's passage:

"This bill and its companion in the House will level the playing field for all retailers – both online and off – while safeguarding states’ rights. And the bill does it all without raising taxes, new government mandates or adding to the deficit. NRF and our broad cross-section of members will work closely with our bipartisan sponsors in the House, Reps. Womack and Speier, and Chairman Goodlatte to ensure that efairness is debated honestly and on its merits. When brought to a vote, we believe the House will pass the bill and it will be signed into law.”

The NRF might have its way as well considering that the Marketplace Fairness Act has the support of the President, and more importantly, the support of many prominent Republican governors around the country. Their support may go a long way in convincing those currently opposed to the bill that it might not be such a bad idea after all.

Either way, the debate over online sales tax is going to get a lot more interesting in the coming months. The House is noisier than the Senate, and there's going to be a lot of political grandstanding on both sides of the issue. You might as well break out the popcorn now.