Supporters of legislation that would require online retailers to collect sales taxes from customers in states where those firms have no store or other facility have some high-profile support from a leading Tea Party figure.
Last week, Gov. Paul LePage, R-Maine, wrote his state's two U.S. senators, Republicans Susan Collins and Olympia Snowe, to urge them to back legislation introduced by Sens. Mike Enzi, R-Wyo., Dick Durbin, D-Ill., and Lamar Alexander, R-Tenn., that would close a loophole left by a 1992 Supreme Court decision. The high court ruled that states can't require retailers such as catalog and now online retailers to collect sales taxes from customers in states where those companies have no physical presence.
"There's no denying that passing the bill would give thousands of small Maine businesses a real boost," LePage wrote. "Through no fault of their own, federal policy now gives some out-of-state corporations an unfair advantage over other Maine retailers."
LePage, like many other Tea Party activists, has called for lowering taxes on Americans. However, LePage echoed congressional supporters in insisting the Senate bill does not authorize any new taxes but would instead allow states that meet certain conditions to require retailers to collect sales taxes that are already owed by consumers.
States say they are losing billions in uncollected taxes on Internet sales, while brick-and-mortar stores argue that online-only stores have an unfair advantage. Durbin, who also serves as Senate majority whip, said he would like get more GOP support for the bill to help attract the 60 votes needed to overcome a likely filibuster of the legislation. So far, three other Republicans besides Enzi and Alexander have signed on as co-sponsors while six Democrats are co-sponsors.
The bill has won broad support from some major players in the retail industry including brick-and-click companies like Target and Wal-Mart, as well as Amazon, even though it has fought some state-level efforts to close the sales tax loophole. Representatives from a coalition of companies that support the bill are coming to Washington Wednesday to lobby members of Congress to support the legislation.
The bill is opposed primarily by eBay and Overstock as well as by the influential anti-tax group Americans for Tax Reform. However, the group has not said whether it would consider a vote in favor of the Senate bill as a violation of its no-tax increase pledge, which has been signed by most congressional Republicans and many GOP state officials including LePage. A spokesman for the group said it is waiting to see if the bill changes as it progresses through Congress.