Senate Renews Efforts on Internet Sales Taxes

July 16, 2014

Yesterday evening, Senate Majority Leader Harry Reid (D-NV) announced that the Senate would be attaching the Marketplace Fairness Act to the Internet Tax Freedom Act that is pending in the Senate.  This news comes hours after the House passed a clean and permanent extension of the Internet Tax Freedom Act, which bans state and local taxes on Internet access.

"Why wouldn't we?" said Senator Mike Enzi (R-WY), one of the original sponsors of the Marketplace Fairness Act. "They're a perfect fit."

Last May, the Senate passed the Marketplace Fairness Act, which forces small tech-enabled businesses to become tax collectors for every state in the country. However, the House, having concerns with the legislation, refused to take up the Marketplace Fairness Act and instead looked at other potential legislative solutions based on the set of seven principles released by House Judiciary Committee Chairman, Bob Goodlatte (R-VA) last September.

The Senate's move to attach the Marketplace Fairness Act to the Internet Tax Freedom Act has created a potential showdown between the House and the Senate. The Internet Tax Freedom Act expires on November 1st, which means consumers and businesses will see their Internet bills go up if the law is not extended.

A number of Members of Congress oppose efforts to marry these two bills. Senator Ron Wyden (D-OR), Chairman of the powerful Senate Finance Committee said that "They're separate issues. The Marketplace Fairness bill as written now is contradictory to what the Internet Tax Freedom bill is all about".

Congressman Steve Daines (R-MT), along with 9 bipartisan Members of Congress, sent a letter to House leadership last week urging them to avoid attaching any controversial pieces of legislation to the Internet Fax Freedom Act.

eBay Inc. opposes the Marketplace Fairness Act as currently written and believes that small businesses should not be forced to collect taxes for every jurisdiction in the country. For more information on eBay Inc.'s position on the Marketplace Fairness Act, visit our Internet Sales Tax issue page.