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Posted by: Maricopa Lawyers on Apr 22, 2013

A new state sales tax on online transactions may be making it’s what to the Senate floor in the next coming weeks

Senate majority leader Harry Reid began the process late Tuesday that would put a bill known as the Marketplace Fairness Act, to be presented before the Senate without first going through the Senate Finance Committee. The Senate Finance Committee has largely been opposed to the measure.

A spokesperson for Reid did not respond to as to whether the Senate leaders hope to pass the legislation through unanimous consent or hold onto the bill until it can be presented in a full floor debate. However, the Senate could vote on the measure as soon as next week.

Democrat Senator Max Baucus chastised the bill during March’s budget debate stating that what the country needs isn’t simply an online state sales tax but comprehensive tax reform guided by the Senate Finance Committee. Yet, if Harry Reid uses the aptly named Rule 14 process, the legislation could bypass the Committee entirely.

Many governors have been pushing for the ability to force online retailers to collect sales taxes on purchases made by customers who live out of state. As the situation stands online merchants do not have to collect sales taxes in states where they lack a physical presence. This provision came about in a 1992 Supreme Court ruling. But as the online retail industry has grown over the past 20 years U.S. States lose billions of dollars in tax revenue. Additionally, retailers with physical location argue that they are at a competitive disadvantage as they have to inflate prices to accommodate the sales tax.

Lawmakers held a test vote for the bill as a part of the year’s budget debate. The online sales tax amendment garnered an intense argument between supporter such as Senator Dick Durbin and opponents Senator Ron Wyden and Senator Kelly Ayotte.