Internet Tax Decision by Congress Not Expected This Year
Legislation that could have mandated new online sales taxes across the U.S. aren't expected to move forward during the last weeks of the lame duck Congress.Proposed legislation mandating Internet taxes for online purchases across the nation won't be considered by the lame duck Congress this year after U.S. House Speaker John Boehner said he has "significant concerns" about an existing Senate plan for such taxes. Boehner's comments about not reviewing the Internet tax legislation this year were reported in a Nov. 11 story by The Wall Street Journal. A previously approved moratorium on broadly collected taxes on Internet-based purchases will expire on Dec. 11, making the issue more complicated for the nation's 9,600 state and local taxing authorities that are waiting to find out if they will ever be able to tax Internet purchases as a new revenue stream. The proposed Senate plan, which is being led through a bipartisan effort by Senate Majority Leader Harry Reid (D-Nev.) and Sens. Dick Durbin (D., Ill.) and Mike Enzi (R., Wyo.), "has been trying to meld the popular moratorium with a separate measure that would force online merchants to collect sales taxes for all of those 9,600 revenue departments, even in places where the merchants have no physical presence," The Journal reported. The issue was taken off the table for now, the newspaper reported, after Boehner's spokesman, Kevin Smith, said that Boehner was not happy with the Senate proposals. "The Speaker has made clear in the past he has significant concerns about the bill, and it won't move forward this year," Smith told the paper. At this point, Smith continued, "the House and Senate should work together to extend the moratorium on Internet taxation without further delay."
Boehner's stand to let the Senate bill die without a vote this year won't be celebrated by retailers, which have been seeking uniform tax collection processes for online purchases across the nation. Many retailers see Internet tax legislation as a way of leveling the playing field with online merchants that don't have the expenses of running brick-and-mortar stores, according to a Nov. 10 report by the Financial Times.