As speculation mounts that Republicans might tack a bill enacting a national online sales tax on to the federal spending bill, a group of Democratic senators are pulling out the legislative stops to prevent it.
Sens. Ron Wyden from Oregon, Jon Tester from Montana, and Jeanne Shaheen and Maggie Hassan from New Hampshire are Democrats representing states without sales tax who introduced a resolution March 15 opposing the Marketplace Fairness Act of 2017, or MFA, the bipartisan bill that would require online sellers to collect sales tax from customers even if the seller is located in a state without a sales tax.
The bill would "place burdensome and bureaucratic policies on small businesses," the senators said in the three-page resolution, adding that it would "provide no economic benefit to states that do not have sales taxes."
The MFA has been introduced in two previous sessions of Congress, stalling in the House in 2013 despite passing the Senate. However, Republican Sen. Ted Cruz of Texas and Wyden both have expressed concern that the bill could gain momentum by being tacked on as a rider to the federal spending bill. The MFA, reintroduced in Congress in April of 2017 by Sen. Mike Enzi, R-Wyo., has 19 Democrat and 7 Republican sponsors and is now before the Senate Committee on Banking, Housing and Urban Affairs.
Congress has until March 23 to pass its $1.3 trillion omnibus spending bill, or risk another federal government shutdown.
Supporters of the measure say that the MFA would give states the right to collect sales taxes they are owed under law from out-of-state or online sellers, while opponents such as eBay Inc. as well as Cruz say it would impose burdensome requirements on small online sellers by exposing them to nearly 10,000 different U.S. tax jurisdictions.
"Regulators and tax collectors see people prospering on the internet and they want to tax it, regulate it and otherwise stifle its growth," Cruz told reporters March 13. "That would be a serious, serious mistake."
Enzi spokesman Max D'Onofrio declined to comment on whether Republicans plan to add the MFA to the federal spending bill.
The latest MFA momentum comes as the U.S. Supreme Court is set to consider South Dakota v. Wayfair Inc., a case that could also shake up the way e-commerce sales taxes are collected.
Oral arguments will be held in mid-April for the case, which could overturn the 1992 Quill Corp. v. North Dakota Supreme Court decision, which ruled that remote sellers are not required to collect sales if they do not have a physical presence in the state.
The National Retail Federation has said the Supreme Court picking up the case would provide the impetus for Congress to act on the legislation that would establish a national online sales tax.
According to the website, companies that support the MFA include Amazon.com Inc., Target Corp., Macy's Inc., Dick's Sporting Goods Inc. and J.C. Penney Co. Inc.
Online sales tax collection also has support from the executive branch.
President Donald Trump would "strongly" support collecting sales tax from online purchases, Treasury Secretary Steven Mnuchin told the House Ways and Means Committee in February.
