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Topics: House of Representatives

House hits brakes on Internet tax passed by Senate

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Politics,Beltway Confidential,Science and Technology,Congress,Susan Ferrechio,Politics Digest,Taxes,House of Representatives

The House was in no rush to take up an internet tax bill that senators approved Monday night. And even if the House takes up the issue, lawmakers said, it will be a bill very different from the Senate's.

House Judiciary Committee Chairman Bob Goodlatte, R-Va., said to expect “thoughtful” consideration in the House, which will involve committee debate and amendments.

The version passed in the Senate by a 69-27 vote “has a long way to go,” Goodlatte said Monday.

Goodlatte said the Senate bill does not go far enough to simplify the way online businesses would go about taxing out-of-state customers.

The Senate bill would give states the authority to tax large online retailers. Those sellers would collect the sales tax from buyers, even if those customers live in a state with no sales tax.

Conservatives and senators from states with no sales tax opposed the bill. They argued it would be a job-killing burden for small online retailers forced to collect taxes in other states.

Proponents say an online tax is necessary to level the playing field between online and “brick and mortar” retailers who must charge a tax.

States with no income tax particularly like the legislation, because they depend more heavily on sales taxes.

Officials in Virginia, Maryland and the District are all counting on approval of the tax. Virginia and Maryland have already approved transportation plans that require hundreds of millions in new revenue from the online sales tax. The D.C. Council will soon take up a proposal to use revenue from the internet sales tax to eliminate homelessness in the District.

Goodlatte said his committee would consider alternative legislation that would allow states to collect sales taxes “without opening the door to aggressive state action against out-of-state companies.”

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Author:

Susan Ferrechio

Chief Congressional Correspondent
The Washington Examiner