Senators Seek To Shield Small Businesses From Online Sales Tax Bills

Sens. Ron Wyden (D-OR) and Kelly Ayotte (R-NH) introduced a nonbinding resolution that calls on the Senate to exempt small businesses from legislation that would authorize states to require Internet retailers to collect sales taxes from out-of-state customers.

"It is the sense of the Senate that Congress should not enact any legislation that would grant state governments the authority to impose any new burdensome or unfair tax collecting requirements on small Internet businesses and entrepreneurs, which would ultimately hurt the economy of, and consumers in, the United States," the resolution states. The resolution appears to target legislation being crafted by a bipartisan group of senators that would authorize states to require online retailers to collect sales taxes from customers in states where the stores have no brick and mortar building. A 1992 Supreme Court decision found that states cannot require retailers to collect sales taxes to people in states where those retailers lack a physical presence. Since then, states have complained that they are losing billions of dollars in revenues because of the loophole, which originally applied to catalog retailers but has since been extended to online retailers.