Internet sales tax advances after Obama endorsement

The Marketplace Fairness Act, legislation that would empower states to tax online purchases, cleared a key hurdle in the Senate after winning an enthusiastic endorsement from President Barack Obama.

Senators advanced the bill 74-20 in procedural vote, just one vote short of the backing it received in a test vote last month. Twenty-six Republicans joined Democrats in moving forward with the bill. The Senate will now begin debate on amendments. The chamber is expected to hold the decisive vote on the bill later this week.

Major retailers are putting all their lobbying muscle behind the legislation, arguing it would close an unfair loophole that benefits online merchants over brick-and-mortar stores. The National Retail Federation, which represents chains such as Best Buy, Macy’s and J.C. Penney, and the Retail Industry Leaders Association (RILA), which counts Target and others among its membership, announced it would score lawmakers’ votes.

But signs of trouble for the bill also emerged as Wall Street groups urged the Senate to slow down and eBay began marshaling its users in a massive campaign to kill it.