Senate Passes Online Sales Tax Bill

WASHINGTON — The Senate on Monday passed a bill that would empower states to require businesses with more than $1 million in out-of-state sales to collect taxes for products they sell on the Internet.

The Senate voted 69 to 27 Monday to pass the bill, which next goes to the House, where antitax sentiment among many Republicans may make it difficult to pass. President Obama has conveyed his support for the measure, called the Marketplace Fairness Act.

States currently can only require retailers to collect sales taxes if the merchant has a physical presence in the state.  

Online sales U.S. totaled $226 billion in 2012, but states lost billions of dollars 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 lobbied for the bill.  

If signed into law, the bill would allow for businesses with less than $1 million in online sales to be exempt.

Supporters of the piece of legislation say the bill makes it relatively easy for Internet retailers to comply. States would provide free computer software to help retailers calculate sales taxes, based on where shoppers live, and establish a single entity to receive Internet sales tax revenue, so retailers don't have to send it to individual counties or cities.

Opponents argue 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.

Opponents also say that the bill creates complicated administrative issues, imposing audits, compliance costs and lost wages for small businesses.

In the Senate, lawmakers from three states without sales taxes lead the opposition — Montana, New Hampshire and Oregon. They said that businesses based in their states should not have to collect taxes for other states. Delaware also has sales tax, though its two senators supported the bill.

"We ought to have a structure in place in the states that treats all retail the same," National Retail Federation CEO Matthew Shay said in a statement. "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."

Related:  

Copyright © 2026 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More News

Full Circle Introduces 2 New Display Planograms

Full Circle has debuted new display planograms for its jewelry line and its bullet vibe collection.

Creative Conceptions Debuts 'Skins' Non-Latex Condoms

Creative Conceptions has introduced the new Skins line of non-latex condoms.

Arizona State Legislator Proposes Porn Ban

A member of Arizona’s House of Representatives on Wednesday introduced a bill that would make it illegal to produce or distribute adult content in that state.

Rouge Group Taps Sean Macauley for Global Sales Manager

U.K. pleasure brand Rouge Group has appointed Sean Macauley as its new global sales manager.

Male Power Debuts 'Gridlock'd' Collection

Male Power has introduced its new Gridlock’d collection of men's underwear.

B-Vibe, Gigi Engle Partner for 'Kink Starter Kit'

B-Vibe and author Gigi Engle have partnered for the limited-edition Kink Curious Kit.

Orion Debuts 'Vibepad Mini' Vibrator

Orion Wholesale has introduced its new Vibepad Mini vibrator.

SCOTUS Won't Hear Appeal in NYC Adult Businesses Zoning Case

The U.S. Supreme Court has declined to hear an appeal by a group of adult businesses of a lower court’s decision allowing enforcement of a 2001 zoning law aimed at forcing adult retail stores out of most parts of New York City.

National Signs Distro Deal With NeuroSource for Happy Mind, XXXTabs

National Distribution has signed a deal with NeuroSource to carry the wellness brand's Happy Mind and XXXTabs product lines.

Nobü Partners With JellyFilledGirls for 'Jëli' Vibrator

Pleasure brand Nobü has teamed up with creator duo JellyFilledGirls to release the Jëli vibrator.

Show More