US Senate expected to pass Internet sales tax bill

The US Senate is expected to vote in legislation this week that would grant states the power to tax Internet-based purchases.

According to the Hill, Senate Majority Leader Harry Reid has filed to end debate on the bill, with a preliminary vote schedule for later today. The bill, which is called the Marketplace Fairness Act, is designed to empower states to collect a tax on online sales, even if the sellers do not operate in that state.

The current law does not require Internet-based retailers to automatically include sales tax in online purchases. Instead, there exists a patchwork of policies, through which some sellers collect taxes in some states. But a federal mandate could helps simplify that process.

A symbolic vote taken last month suggests that the bill will easily pass through the Senate, though it could face a tougher time in the House of Representatives, where it will have to garner final approval before being signed into law.

Local legislators and brick-and-mortar retailers have longed called for an Internet sales tax, in a bid to even out the playing field.

But some opponents in the bill are lobbying against its passage. In emails to millions of eBay users, the online marketplace’s chief executive John Donahoe urged users to contact their congressional representatives to make changes to the legislation.

"This legislation treats you and big multi-billion dollar online retailers - such as Amazon - exactly the same," wrote Donahoe. "Those fighting for this change refuse to acknowledge that the burden on businesses like yours is far greater than for a big national retailer."

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