Executive Briefings

Nonbinding Proposal's Passage Suggests Congress May Be Open to Tax on Internet Sales

The U.S. Senate has overwhelmingly passed a nonbinding proposal to allow states to collect sales tax on internet sellers that have no presence within their borders.

The proposal was an amendment to a 2014 budget bill that the Senate debated Friday. It was pushed by Senators Mike Enzi, a Wyoming Republican, and Dick Durbin, an Illinois Democrat, and was designed to give backers a sense of whether they had enough votes to push forward with final legislation to impose an internet sales tax.

The vote showed they have plenty of backing to overcome any filibuster seeking to block a final sales tax bill. Sixty votes are needed to overcome a filibuster, and senators voted 75-24 for the nonbinding resolution. The Enzi and Durbin amendment would allow the Senate Budget Committee to include the sales tax in the budget, providing it does not increase the federal deficit.

The budget amendment is an initial step toward allowing state and local governments to collect sales taxes from out-of-state retailers who sell more than $1m worth of products in a year over the internet. Enzi and Durbin are the lead sponsors of the Marketplace Fairness Act, which would still have to pass through Congress before a tax is imposed.

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The proposal was an amendment to a 2014 budget bill that the Senate debated Friday. It was pushed by Senators Mike Enzi, a Wyoming Republican, and Dick Durbin, an Illinois Democrat, and was designed to give backers a sense of whether they had enough votes to push forward with final legislation to impose an internet sales tax.

The vote showed they have plenty of backing to overcome any filibuster seeking to block a final sales tax bill. Sixty votes are needed to overcome a filibuster, and senators voted 75-24 for the nonbinding resolution. The Enzi and Durbin amendment would allow the Senate Budget Committee to include the sales tax in the budget, providing it does not increase the federal deficit.

The budget amendment is an initial step toward allowing state and local governments to collect sales taxes from out-of-state retailers who sell more than $1m worth of products in a year over the internet. Enzi and Durbin are the lead sponsors of the Marketplace Fairness Act, which would still have to pass through Congress before a tax is imposed.

Read Full Article