The U.S. Senate on Thursday failed to pass bipartisan legislation that would allow states to collect sales taxes from larger Internet retailers, but the bill cleared a key procedural hurdle and is on track for approval after lawmakers return from a recess.
Momentum has been building for the Marketplace Fairness Act, which is strongly supported by most state and local governments and traditional brick-and-mortar retailers. Rep. Suzan DelBene, D-Wash., is a co-sponsor of the legislation and said it would help with the state’s budget woes.
“Over $280 million in this current biennium would be generated if we were also charging sales tax online,” DelBene said.
Supporters actually include Amazon.com, which already has to collect sales tax in a handful of states, including Washington, where it has a physical presence. It wants other e-retailers to as well.
But opposition from some online retailers, led by EBay Inc., and a small group of senators largely from states that do not have sales taxes derailed the legislation temporarily. Still, it’s expected to pass May 6.