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Senate OKs taxing online sales

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By From Wire and Online Reports
Monday, May 6, 2013, 8:27 p.m.

WASHINGTON — The Senate voted 69 to 27 on Monday to pass a bill to tax online shopping.

The vote is a major victory for retail groups and state governments, who for years have fought to close what they believe is a loophole that allows as much as $23 billion in annual taxes from online sales to go uncollected.

“I've been saying it for the past 12 years,” said lead sponsor Sen. Mike Enzi, R-Wyo. “This bill is about fairness; it's about leveling the playing field for brick-and-mortar shops.”

The bill would empower states to require businesses with more than $1 million in out-of-state sales to collect taxes for products they sell on the Internet, in catalogs and through radio and TV ads. Under the legislation, the sales taxes would be sent to the states where a shopper lives.

Under current law, states can only require retailers to collect sales taxes if the merchant has a physical presence in the state. As a result, many online sales are tax-free.

Opponents, including some well-known conservative groups and the online retailer eBay, have vowed to keep up the fight in the House, where the path forward is less clear.

Arkansas Republican Rep. Steve Womack, the lead GOP sponsor of the House online sales tax bill, has said he wants and expects it to proceed through the committee process, The Hill reported. The House version has collected more than 60 co-sponsors.

But the vote has's blessing, The Seattle Times reported.

The Seattle company's endorsement — coming from a chief beneficiary of the tax advantage the bill is intended to eliminate — is widely viewed as an acknowledgment that the days of tax-free shopping online are numbered.

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