Roll Call: Latest News on Capitol Hill, Congress, Politics and Elections
November 26, 2015

Democratic Leaders Plan to Bypass Wyden on Internet Sales Tax Combo Bill (Video)

Durbin wants to require companies to collect state sales taxes on online transactions. (Bill Clark/CQ Roll Call File Photo)

Durbin wants states to be able to collect sales taxes on online transactions for out-of-state purchases. (Bill Clark/CQ Roll Call File Photo)

Senate Democratic leaders plan to do an end run around Senate Finance Chairman Ron Wyden and combine House-passed legislation extending a moratorium on taxing Internet access with a Senate-passed proposal to require online retailers to collect sales tax.

“I think it’s fair to say the two are going to be together,” Senate Majority Leader Harry Reid, D-Nev., told reporters Wednesday.

The Internet Tax Fairness Act passed the House Tuesday by a voice vote. The Marketplace Fairness Act passed the Senate last year, shepherded by Majority Whip Richard J. Durbin, D-Ill., and Sen. Michael B. Enzi, R-Wyo.

“There is a deadline, Nov. 1,” Durbin said. “The Internet Tax Freedom Act would expire. States and localities would be able to tax the Internet, which is something none of us want to see; I shouldn’t say none of us, most of us don’t want to see that happen.

“So now we have suggested to the sponsors and supporters of that measure that if they join it with Marketplace Fairness that we have might have a great package to get done on time,” Durbin continued.

Durbin said Sen. Lamar Alexander, R-Tenn., “has made it clear that he wouldn’t allow the Internet Tax Freedom bill to go forward unless Marketplace Fairness was joined to it. So I think we have stated our position clearly.”

Alexander said it’s a sound approach, but was unsure of the timing.

“I think that’s a very promising approach,” Alexander said. “I don’t know whether there will be time to do it between now and August or right after we come back,”

Doing so would effectively bypass Wyden.

Wyden also pushed for a permanent fix of the “sustainable growth rate” formula that requires cuts in doctor pay under Medicare, but Democratic leaders ultimately accepted a 13-month patch, which was cleared in March.

And Wyden initially pushed for a Highway Trust Fund patch that would expire at the end of December and force action in the lame duck. But last week he passed through his committee a bipartisan patch that stretches through May of next year. The bill is similar to a House proposal that was backed by President Barack Obama.

Durbin said he hopes to try to win Wyden’s support.

“This issue came up before he was Finance chair and it enjoys broad support within the Democratic caucus and among Republicans,” Durbin said. “So I hope that … we can work with him to find a suitable approach to it. But it’s a critically important issue. My state and 45 others are losing huge amounts of revenue and there are businesses that are failing because of our refusal to take up this measure. So I think we need to roll up our sleeves and get it done.”

For his part Wyden rejected the idea of packaging the two bills together.

“Senator Wyden is committed to seeing the Internet Tax Freedom Act permanently extended, and preventing states from placing discriminatory regulations on the Internet,” a Wyden aide said. “He is working with a number of members who understand that combining ITFA with the Marketplace Fairness Act would only undermine that effort.”

Durbin said even if the package passes the Senate, questions remain in the House where Judiciary Committee Chairman Robert W. Goodlatte, R-Va., doesn’t like the Senate Marketplace Fairness bill.

“The House is always a problem,” Durbin said. “We have tried repeatedly, repeatedly for meetings with House members to talk about finding common ground. They have canceled every meeting. So this is our approach. We want to join Marketplace Fairness with Internet Tax Freedom. I hope we can do that on the floor of the Senate and send it back to the House.”

  • Internet Sales Tax

    Why do these lawmakers back Walmart funded legislation? The marketplace fairness act is funded by Walmart through campaign contributions. Vote the crony capitalists out of office. This whole country needs new leadership.

  • Facebook User

    Proponents of this bill say it will be easy. REALLY? Have they ever tried to integrate tax software into a customized shopping cart? LOL!! Like “OBAMACARE“ easy? Even if we take them at their word “only one state tax
    rate” and “perfect running software to calculate”, HOW WOULD PAYMENTS GET REMITTED to all 46 states? Do we write 46 monthly checks? Fill out
    46 separate monthly sales tax returns?


    Not all small merchants are order automated and to input additional information by hand is both time consuming and interferes with normal business operations. What about audit risk? Can the tax board in Tennessee come after a merchant in Florida? Is it moral to burden an out of state merchant to collect taxes on behalf of a state they don’t live or work or vote in? Why not ask China or Mexico to collect Tennessee taxes? Is this constitutional? Will surely be challenged in the courts, but why this legislation is truly harmful is that in such a weak recovery (check labor participation rate, wage growth, hours worked, etc.) you are burdening the very small businesses that are one of the only sources of growth in our economy. Hiring in this sector will freeze or decline and companies that are mobile and of large enough scale will simply move offshore. Our tax code is already written in a manner that encourages large companies to domicile offshore, this legislation encourages the medium and even portable smaller sized USA businesses to join them in order to compete with websites that won’t have to collect this tax in the Caribbean, Mexico, Canada, etc.

    The tax revenue collected will come right out of the pockets of the average American family and the extra $$$ our citizens will have to pay means LESS discretionary income in their pockets to spend locally.

    In terms of “Fairness”, there is Z E R O entry barrier for any brick and mortar retailer to sell their products online.

    HOW ABOUT AN OPT OUT OPTION? We agree not to ship to states that want us to collect sales tax and then we are not forced to multiple file and take the audit risk? One million dollars of revenue does not make you a big business…….at a 5% profit (small margins are common online) you are making a whopping $50K of gross profit annually……this will ensnare and burden a TON of small businesses if passed in its current configuration.

    • Baxter

      “Is it moral to burden an out of state merchant to collect taxes on behalf of a state they don’t live or work or vote in?”

      Why yes, it is. That out of state merchant is making money off the roads and airports located in the state they don’t work in. They’re degrading that state’s infrastructure, marketing and advertising to its citizens, and all without helping that state obtain the revenues needed to monitor and remediate those things.

      I suppose you think it’d be more moral for the state to prosecute each of its citizens for tax evasion for their failure to pay tax on their Amazon purchases?

      • tzalinsky

        Get a life Baxter, online drives offline sales. Online is only 8% of all retail. It’s a drop in the bucket.

        Amazon is already paying tax because they are located in all the states. All the big guys like Walmart are paying tax. This only hurts small guys trying to compete… and pop online.

        Mom and pop brick and mortar is a lost cause anyway. If you aren’t on the internet, all the sales tax laws in the world aren’t going to save your business.

  • tzalinsky

    If they really cared about revenue for local and state governments WHY DON’T THEY ALLOW THEM TO TAX THE INTERNET PROVIDERS? They don’t want the states to tax the internet companies, they just want to tax the consumers. What a bunch of M*ther F*ckers! Freedom for Verizon and AT&T with record profits and taxes for people needing to save money.


    Both political parties have long forgotten about the more than three million unemployed families still without unemployment benefits since late last December. Over the past seven months, these families have fallen deeper and deeper into financial ruin and poverty. Both parties seem to lack the compassion to even care. While the republicans have fought tooth & nail on behalf of their constituent the Koch brothers, they continued to ignore the poor & unemployed. Congress has approved billions of dollars for the Ukraine, but lacks the moral fiber to help our own people in this country. These families are not going away, they are still in desperate need of a retro extension bill to help them recover from this economic catastrophe. Where are the “family values” which the republicans represent themselves as having??

  • bill

    To facebook user comments,There is software out there that can collect ,Remitt and indemnify you. ALLL FREE CALLED TAX CLOUD ,Thats todays Technololgy.
    I’ve used them for my business.
    Takes 20 min to sign up and then your done.

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