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Congress considers bill to tax online retailers

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Posted 1:25 PM 7/24/2012 : Congress considers bill to tax online retailers

(NBC NEWS) - Congress appears close to finally figuring out a way to help states collect sales tax from online retailers.

Legislation to do just that is seemingly on a fast track, because states say they desperately need the revenue. From the moment online retailing took off in the mid-1990's, states have complained about uncollected sales taxes...

"The current estimate of sales tax that goes uncollected each year in the U.S. is more than $20 billion!" said Tennessee Governor Bill Haslam.

And states say this is tax money they desperately need right now. Brick and mortar retailers complain, too, saying it's an unfair advantage for online retailers who are already on top.

"It will overtake, 35 overtake the sales at brick and mortar stores by the year 2020," said Rep. Jackie Speier, of California.

It's why Congress seems as close as ever to passing the Martetplace Equity Act, which will require online merchants to collect and send to each state the sales tax on each transaction.

"In short, this bill levels the playing field in the world of retail sales," said Arkansas Rep. Steve Womack.

Only congress can force collection of state taxes on internet sales, and the legislation has support from both sides of the aisle, even from anti-tax Republicans like Tennessee's Haslam.

"This discussion is about states having the flexibility and authority to collect taxes that are already owed by in-state residents," he said.

Online retail giant Amazon anticipated all this, and has started collecting sales taxes for several states, while other internet businesses say figuring out the tax rates of the nearly $10,000 states, cities and towns will be more than tough.

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