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'Amazon tax' gains bipartisan support, likely to move through Congress this year

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By Reuters
Thursday, Feb. 14, 2013, 9:03 p.m.

WASHINGTON — States could collect millions of dollars more in online sales taxes, with members of both parties in Congress sponsoring legislation on Thursday that would resolve states' decades-long struggle to tax businesses beyond their borders.

“Small businesses and states alike are suffering from the inability to collect due — not new — taxes from purchases made online,” said Rep. Steve Womack, R-Ark., adding that the legislation is a “bipartisan, bicameral, common-sense solution that promotes states' rights and levels the playing field for our Main Street businesses.”

Amazon started charging Pennsylvania's 6 percent sales tax on Sept. 1 per the state's Department of Revenue that requires companies with a physical presence in the state to collect sales tax.

Amazon has multiple locations in the state.

It also collects the tax in seven other states.

Legislation on the Amazon tax, nicknamed for the colossal Internet retailer, has languished in Congress for years.

In 1992 the Supreme Court decided the patchwork of state tax laws made it too difficult for online retailers to collect and remit sales taxes.

States can only tax Internet sales made by companies with a physical presence within the state's borders.

In practice, that means online retailers such as Inc. collect sales tax in some states and not in others.

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