POLITICS

States Lobby For Internet Sales Tax Bill To Pass Congress

12/05/2012 03:41 pm ET | Updated Dec 05, 2012

WASHINGTON -- The nation's state legislators are spread out across Capitol Hill Wednesday afternoon lobbying Congress for the ability to place a sales tax on goods sold online.

State lawmakers, in town for a National Conference of State Legislatures meeting, are pressing members of Congress to pass the Marketplace Fairness Act in order to provide states with the ability to collect a sales tax on online purchases made by state residents. Federal and state advocates for the legislation are describing the bill as an economic tool for states and local governments, along with helping downtown businesses, rather than a tax hike.

"The stars are finally aligning in our favor for passage," Utah state Sen. Curt Bramble (R) told state legislators during a Wednesday afternoon briefing on Capitol Hill. "The Marketplace Fairness Act permits Congress to provide funds for the states without funds coming from the states. We are asking for control over our own destiny."

The legislation has been pushed in Congress for more than a decade and has been a priority for national groups representing state governors and lawmakers in Washington. The proposal follows a 1992 U.S. Supreme Court decision which allows states to collect sales tax from residents who purchase online or catalog merchandise, if the residents provide the information to state tax collectors. State officials have long said residents don't provide the information and taxes, costing states an estimated $23.3 billion in 2012 sales tax revenue alone.

In addition to the revenue, internet sales-tax advocates describe the legislation as helping small business, particularly those in downtown areas, which they say are losing business to internet retailers due to the sales tax issue.

"Our retailers have such a hard job, all they are asking for is fairness," U.S. Rep. Peter Welch (D-Vt.) told state lawmakers during the briefing. "People go in to use it as a showroom and go home and order on the internet and do not pay sales tax."

Welch was joined by Rep. Steve Womack (R-Ark.) and Sen. Mike Enzi (R-Wy.), other sponsors of the legislation in talking to state lawmakers Wednesday.

Enzi and Womack told state lawmakers that the internet sales tax would help during the current fiscal cliff talks since it would provide a new dedicated revenue source for state and local governments. Womack, a former mayor, noted that while revenues are decreasing from other sources, local governments need to fund such services as police, fire, parks and roads. NCSL has placed the tax bill's passage as part of their deficit reduction program.

Womack noted that much of the opposition has come from his Republican colleagues who viewed the issue as a tax hike. He told state lawmakers to stress to Republican lawmakers that the bill only allows states to collect tax revenue that already exists and said that the bill is actually a "conservative" issue since it allows for state's rights and helps the free market process.

"It is not a new tax, it is a due tax," Womack said.

Former Kansas Revenue Secretary Joan Wagnon, who is working with her state legislators to push the issue, told HuffPost that several factors have arisen that put the bill in its best position since she started working on the issue in 2003. She noted that in addition to tax-collection concerns being addressed, U.S. Senate Majority Whip Richard Durbin (D-Ill.) has become a co-sponsor of the bill, providing leadership backing.

Wagnon, now the Kansas Democratic Party chairwoman, noted that the bill would be a benefit for rural states, where many residents choose to shop online rather than use a tank of gas to drive to a retail center. She said for those states, including her own, the legislation would allow state officials to collect the revenue from those consumers.

"They don't mean to be tax evaders," Wagnon said.

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