US senators introduce online sales tax bill

By BEN NEARY, BusinessWeek.com

A proposal from a bipartisan group of 10 U.S. senators to allow state governments to collect sales taxes from out-of-state online retailers is drawing a mixed reaction from some major Internet businesses.

The group is led by Sens. Mike Enzi, R-Wyo., Dick Durbin, D-Ill., and Lamar Alexander, R-Tenn. They announced Wednesday that they’re introducing a bill to allow states that adopt the same administrative procedures to require online sellers to collect taxes.

Under the bill dubbed the “Marketplace Fairness Act,” state governments that don’t accept the national standard could still collect sales taxes only if they agree to some minimum streamlining of their tax system. Sellers will less than a half-million dollars in annual sales would be exempt.

Internet retailers are currently required to collect sales tax for a state only when they have a physical presence such as a store or office there. When consumers order from out-of-state retailers, they may technically be required to pay the tax to their home state but don’t always do so.

Amazon.com Inc., a leading Internet retailer, announced Wednesday that it strongly supports the bill. The company has fought some taxation efforts from several states and said it would prefer a federal solution.

Amazon Vice President Paul Misener said the company plans to work with Congress, retailers and states to get the bill passed. “It’s a win-win resolution,” he said.

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