An Amazon executive said Tuesday that he sees a shift in momentum in favor of legislation his company supports that would authorize states to require online company's such as his own to collect sales taxes from out of-state customers.
"I'm optimistic because the political dynamic has changed," Paul Misener, Amazon's vice president for global public policy, said during a discussion on the issue at the annual State of the Net conference.
Misener noted a bipartisan Senate bill that Amazon backs would allow the federal government to help cash-strapped states bring in additional revenues without having to provide any federal funds. He added that he is "heartened" that the debate appears to have shifted away from whether to pass legislation to how it should be crafted and how big of an exemption should be included for small businesses.
The Senate bill, authored by Sens. Dick Durbin, D-Ill., Mike Enzi, R-Wyo., and Lamar Alexander, R-Tenn., would authorize states to require online retailers to collect sales taxes from out-of-state customers if states agree to some tax simplification principles outlined in the bill or sign on to a multi-state tax simplification effort known as the Streamlined Sales Tax project.
States and some brick-and-mortar retailers have been pressing for congressional action since the Supreme Court ruled in 1992 that retailers do not have to collect sales taxes from customers in states where those firms do not have a store or some other physical presence. While the decision at the time applied to catalog sales, it has since been extended to sales made over the Internet. States argue the loophole has cost them billions of dollars in lost sales tax revenues and that the problem will get worse as more sales migrate to the Internet.
After fighting state efforts to address the problem on their own, Amazon came out in support of the Senate bill late last year, saying it wanted to see a federal solution to the issue. Reps. Steve Womack, R-Ark., and Jackie Speier, D-Calif., introduced similar legislation in the House but Amazon prefers the more limited small-business exemption in the Senate bill.
Bill Hughes, senior vice president of government relations for the Retail Industry Leaders Association, said while his group expects to see an aggressive push by congressional supporters in both chambers, he questioned whether the current Congress could move such legislation. "There is such low expectations for this Congress to be able to accomplish anything," Hughes said. His group, which favors both the Senate and House bills, represents major brick-and-click retailers including Best Buy, Target and Wal-Mart.
NetChoice Executive Director Steve DelBianco, who represents two of the biggest critics of the Internet sales tax measures, eBay and Overstock.com, argued the legislation will impose new record-keeping burdens on small businesses and predicted it will spark a backlash from many small firms that sell goods and services on the Internet. At the same time, he said the legislation faces long odds in the House where "there is a strong sentiment against new taxes."