House Online Sales-Tax Bill Draws Bipartisan Support

Reps Steve Womack (R-AR) and Jackie Speier (D-CA) introduced legislation to close a loophole that allows some online retailers to avoid collecting sales taxes on some transactions.

The bill would authorize states to force retailers to collect sales taxes, even online firms, and even when their customers reside in states where the companies have no physical presence. The bill would require states to simplify the process for out-of-state retailers, including providing a single sales tax rate, designating a single source for remitting sales taxes from out-of-state sales, and establishing uniform rules for what sales are taxable. Small retailers with annual in-state sales of less than $100,000 and national sales of less $1 million would be exempt from having to collect taxes on out-of-state sales. Many states have been pushing lawmakers to close the loophole created by the Supreme Court's 1992 Quill decision that found retailers don't have to collect sales taxes from customers in states where those companies do not have a physical presence.