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Debate rages over contentious Internet sales tax proposal

John P. Mello Jr. | April 23, 2013
As a proposed Internet sales tax bill rushes through the Senate, opponents argue caution.

Many states rely on sales tax to fund basic government functions, and online sales are skyrocketing.

"This legislation will level the playing field for retailers, while protecting small businesses from complicated laws in other states with a healthy small business exemption," National Retail Federation senior vice President David French said in a letter to Senate members last week.

"As the retail industry evolves and digital commerce becomes a more prominent portion of total retail sales, it is critical that the tax laws not discriminate between similar businesses based on how their products are distributed," it added.

While French's arguments are likely to sway the Senate this week, they may not be as persuasive in the House, where the bill is looked on with some degree of skepticism.

The jurisdictional quagmire surrounding sales tax collection is particularly bothersome to the chairman of the House committee that will be reviewing the bill after it clears the Senate.

"While it attempts to make tax collection simpler, it still has a long way to go," Judiciary Committee Chairman Bob Goodlatte (R-Va.) told The Hill Sunday.

"There is still not uniformity on definitions and tax rates, so businesses would still be forced to wade through potentially hundreds of tax rates and a host of different tax codes and definitions," he added.


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