WASHINGTON, May 6 (UPI) — The U.S. Senate Monday voted 69-27 to allow states to collect sales tax from big out-of-state Internet retailers.
The measure, called the Marketplace Fairness Act, now goes to the Republican-controlled House of Representatives where its fate is unclear, The Hill reported.
The Washington publication said House Judiciary Committee Chairman Bob Goodlatte, R-Va., has said he intends to take his time poring over the legislation, which has the support of President Obama.
States now can only collect sales tax from companies with a physical presence in their state — so-called brick-and-mortar retailers. In theory, consumers who buy online from another state are to declare their purchases on their tax forms, but in reality most don’t.
The bill the Senate approved would allow states to go ahead and tax out-of-state, online retailers. Businesses that earn less than $1 million annually would be exempt.
The measure is meant to level the playing field between brick-and-mortar retailers and their Internet competitors. Opponents say it would be difficult to enforce and the field is already level because Internet companies have shipping costs brick-and-mortar sellers don’t.
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