Retailers Regroup for Online Sales Tax

After falling short again this year, retail groups are regrouping for another push for online sales tax legislation. With a new GOP-controlled Congress the tactics may have to be tweaked slightly, but interest groups have certainly not given up their fight to give states more power to collect sales taxes from out-of-state residents. 2015 may indeed shape up to be a watershed year for sales tax legislation.

Retail groups insist their longstanding message- that legislation is needed to correct an unfair imbalance between brick-and-mortar stores and online outfits- doesn’t need much adjustment. Many bills were simply stalled in congressional gridlock and that was the fate of this one as well.

Groups supporting the bill, known as the Marketplace Fairness Act, say they will take the next couple of weeks to regroup, and to find ways to adjust their lobbying techniques and adapt it for the next Congress.

House Republican supporters of online sales tax met with John Boehner last month to state their case, but Boehner declined to bring up any measure. However, GOP supporters say the Speaker is open to passing legislation this year, and that they won’t be passive in pushing for action.

Advocates are urging Congress to legislate over a 1992 Supreme Court decisions that said states could only collect sales taxes from businesses that have a physical location within their borders. This legislation, it is estimated, could raise as much as $23 billion a year for state governments, yet opponents maintain the measure would act as a tax increase on consumers and favor large, established retailers over smaller internet-sellers.

Despite suffering a major blow last year, the issue is far from going away. According to supporters, it simply revealed the challenge that their lobbyists are facing, in finding new ways to advocate after years of inaction. The outlook of the legislation’s supporters was perfectly summed up by Senator Mike Enzi from Wyoming, “I’ve worked on it for 18 years, I can work on it for 19.”

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