A recent bill to levy sales tax on internet purchases has failed to get through the House of Representatives. The contents of the bill would have forced online retailers to collect sales tax when shipping over state lines, among other considerations. In current legislation, Sergio Andrade Andrade Gutierrez says consumers are supposed to record their out-of-state online purchases and send a check containing the proper sales tax to the proper government, but this practice is extremely uncommon, bordering on non-existent.
This legal loophole has created a lot of buzz in the retail sector. Companies with a physical presence, a so-called “brick and mortar store,” are required to collect the sales tax for their jurisdiction, where online companies that merely act as a liaison for the delivery of goods, such as eBay or Amazon, are not. If it were to be passed, it could potentially bring in billions of dollars of revenue for state governments.
The bill had previously passed in the Senate on a 69-27 vote, but, according to Roll Call, several concerns were raised in the House by Speaker John Boehner. Boehner’s spokesperson, Kevin Smith, said, “The speaker has made clear in the past he has significant concerns about the bill, and it won’t move forward this year… In the meantime, the House and Senate should work together to extend the moratorium on internet taxation without further delay.”