53 votes

Senate OKs Internet sales taxes, bill goes to House

Internet taxes? Not so fast.
A bill that would let states collect Internet sales taxes from online retailers and their customers may have sailed through the Senate, but it is expected to face much more resistance from tax-wary Republicans in the House.

Though the Marketplace Fairness Act, sponsored by Sens. Richard J. Durbin, Illinois Democrat, and Mike Enzi, Wyoming Republican, is a bipartisan bill that is backed by more than 20 House Republicans, supporters and opponents both agree it will be a “harder fight” in the House with billions of dollars in future e-commerce at stake.
“It’s definitely going to be tougher than the Senate vote,” said Claire Burghoff, communications director for Rep. Steve Womack, the Arkansas Republican who is sponsoring the bill’s sister legislation in the House. “But we’re really confident in its prospects that we can get this done once and for all.”

The Senate voted 69-27 on Monday to send the Marketplace Fairness Act to the House for final passage.
Technically, it would not create a new tax. Consumers are already supposed to pay sales taxes directly to the government when they shop online. But some studies estimate that as much as $23 billion in online sales taxes go uncollected each year, because many consumers don’t realize this.

So the bill would require Internet retailers to collect the tax — just like their brick-and-mortar peers now do. The government sees this as a more efficient means of collection.
“Some suggest this is a tax on the Internet,” Sen. Lamar Alexander, Tennessee Republican, said during Monday’s floor debate. “But every senator knows there’s a law against taxing the Internet. This is a tax that everybody owes that only some people pay.”

States have thrown their support behind the Marketplace Fairness Act, because they want these uncollected taxes to help fill their coffers. Brick-and-mortar stores also support it as a way to level the playing field. They point out that online stores enjoy an unfair advantage, because many consumers go online to save money by avoiding sales tax.


Roll Call of who voted on Amendment S.Amdt. 741 to S. 743
(Thanks bejay)

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Since the original intent of

Since the original intent of the commerce clause was to preclude the ability of states to write legislation that discriminates against other states, is there any chance this could get struck down, or is the "commerce" regulation of the Feds basically unlimited at this point?


No and if anything it is the one time in the last 100 years that the commerce clause is used correctly. The original intent of the commerce clause was to do exactly what it says; regulate commerce between states and countries. The feds are supposed to be like a judge between two states disputing some commerce issue. For example, if Maryland is trying to import wine from North Carolina but Virginia says "you can't pass that through our state" the feds can say "yes they can". This falls right into that category. It is the federal government granting a power between states that could not exist without the federal government exercising their power to regulate interstate commerce.

Unfortunately, it looks like

Unfortunately, it looks like the Supreme Court thinks Congress has this power too. From Quill v. North Dakota:

This aspect of our decision is made easier by the fact that the underlying issue is not only one that Congress may be better qualified to resolve, 10 but also one that Congress has the ultimate power to resolve. No matter how we evaluate the burdens that use taxes impose on interstate commerce, Congress remains free to disagree with our conclusions. See Prudential Insurance Co. v. Benjamin, 328 U.S. 408 (1946). Indeed, in recent years, Congress has considered legislation that would "overrule" the Bellas Hess rule. 11 Its decision not to take action in this direction may, of course, have been dictated by respect for our holding in Bellas Hess that the Due Process Clause prohibits States from imposing such taxes, but today we have put that problem to rest. Accordingly, Congress is now free to decide whether, when, and to what extent the States may burden interstate mail-order concerns with a duty to collect use taxes.

I'm not sure what to think here. It seems like this law would be enabling states to enact protectionist mercantile policies that make shopping at out of state retailers more expensive than shopping in state. Now you have to pay tax AND shipping. My guess is that this will cause Internet companies to start setting up shop outside of the US...leading, naturally, to the Feds enacting tariffs on goods purchased over the Internet. Let's hope this dies in the House and we don't have to find out.


Yeah, it seems pretty clear cut to me. Quill was a 9-0 decision. Almost every piece of garbage coming from Congress incorrectly uses the "interstate commerce clause" as justification. This might be the one instance in recent memory (other than maybe CAFE standards) that was an appropriate use of the Commerce Clause. So in that sense we should all be rather happy.

You say the law causes shopping to be more expensive out of state than in-state. Another way you can look at this is that for years the government has been subsidizing certain businesses with a tax break. Frankly I'm against almost all tax breaks that favor one business over another. These businesses will have to learn to have an efficient model for doing business or go out of business.

If CONGRESS is getting their mitts in it---

you can better believe they will get a "piece of the pie", for sure, somehow, someway.

Send this or something like it to your house rep.

A states taxing authority ends at its borders! Please vote NO on the Marketplace Fairness Act. This act allows states to collect tax money on out of state purchases which is the purview of the federal government's mandate to regulate (or make regular) interstate commerce.

What if a state then makes out of state purchases twice the tax rate of in state purchases?

fireant's picture


The Feds have zero authority to tell a State what or how to tax it's constituents. Totally un-Constitutional.
Here is the tack I'm taking with my "House" Rep:
If we simply follow the Constitution, each state can levi any internet sales which occur within their borders if they so choose. By ignoring the Constitution, it's precepts become even more muddled, making it that much more difficult to unravel it all in the future.

Undo what Wilson did

You may not like this bill

You may not like this bill but it is definitely constitutional.

You can look at this as a dispute between states on where the "sale" of something actually is. Is it where the consumer is or where the seller is. This bill settles that question by assuming a "sales tax" is a consumer tax and therefore the sale is where the consumer is (shipping address). As such, this bill gives authority to a state to require a business not physically located within its borders to register with the state because they are doing business within the state (because the "sale" was within the state as previous stated); this overrides the Supreme Court case on the issue.

Remember, an undesirable result does not mean it is unconstitutional.

fireant's picture

Would it be Constitutional for the Feds to mandate...

that if I go across the state line and make a purchase, that purveyor must charge me an additional sales tax from my home state, and remit to same? There is no difference. The Constitution grants no such power to the Federal Government.

Undo what Wilson did

If you walk across the state

If you walk across the state line and buy it in that state the sale is within that state. It's generally the "where the product is shipped to" which in the case of in-person is within that state. So you're right, there isn't a difference.

The commerce clause has always allowed Congress to regulate interstate commerce and this most certainly is interstate.

I am SOOOOO sick of the

I am SOOOOO sick of the government conscripting business owners to be tax collectors with no pay. It takes so much time to collect these taxes and report them and figure them out that is is ridiculous. These Congressmen should be ASHAMED!! What is worse is that these "tax-payers" have NO representation in other states and I can not even conceive that this is being considered, let alone passed.

Like with every decision they make

set your phazers to dissapointed


Republican Sen. Dan Coats, You will be remembered in 2016.

It's time! Rand Paul 2016!

"Truth, Justice, and the American Way!"

Since this is a bill for raising revenue,

does it not have to originate in the house of Representatives? It says clearly in the Constitution that all bills for raising revenue must originate in the house.

It's not a bill for raising

It's not a bill for raising federal revenue so Article 1 Section 7 doesn't apply.

here you go...


Albert Camus — 'The only way to deal with an unfree world is to become so absolutely free that your very existence is an act of rebellion.'



69% of the Senate are traitors......


"Hence, naturally enough, my symbol for Hell is something like the bureaucracy of a police state or the office of a thoroughly nasty business concern." ~~C.S. Lewis
Love won! Deliverance from Tyranny is on the way! Col. 2:13-15

This means I hate 69% of the Senate. But where was that rat...

...Lyndsey Graham on this vote???

Underneath McCain's desk?

"We have allowed our nation to be over-taxed, over-regulated, and overrun by bureaucrats. The founders would be ashamed of us for what we are putting up with."
-Ron Paul

Cyril's picture

Not so unrelated:

Not so unrelated:

I'm going to prison for arithmetic


"Cyril" pronounced "see real". I code stuff.


"To study and not think is a waste. To think and not study is dangerous." -- Confucius

Mao just gave CONgress a

Mao just gave CONgress a high-five...

If you disagree with me on anything you are not a real libertarian...

Jefferson's picture


to Regret Internet Sales Tax: Marc Andreessen


There's still time to call your House Reps.


Shopping is fun???

I don't get it. Shopping sucks.
I'm the go in, get my 3 packs of tube socks and get out.

Jefferson's picture


did I say shopping was "fun?"

I hate shopping, and don't particularly like shoppers. I'd rather be dragged by a team of horses through a cactus patch then go to a mall.

Most if not all of the gifts I got over the holidays were online through Amazon or similar. Not a big fan of the holidays either.

I'm not a shopper. My quality of life doesn't depend on how many Chinese slave goods I can accumulate. If I'm shopping for something it's ammo.

No, not you Jefferson.......

The guy in the video said "for some people shopping is fun."

I contacted my senators and they both voted yes. %$#@!!@#$%
and I'm sure that my rep is going to vote yes; they're democraps from CT, but I keep after them.
I'll probably keep hounding them after I leave this state out of habit.

Jefferson's picture


sorry there Shootist. I guess I had a misfire..;)

I was wondering how you might have derived that from my post. No harm no foul.

(btw, still grateful for the gif tutorial)

Cyril's picture

Okay, so, what's next, shall we know?

Okay, so, what's next, shall we know?

How about...

A Walking Outdoors Fairness Act (Tax)... Duh, if you don't take your car, we can't tax you.

An Email Inbox Fairness Act (Tax)... Self explanatory. "Inbox" sounds like "income" anyway. What? Yes, it does, slaves.

A Kinda-Free Speech in Public Places Fairness Act (Tax)

A Born Kid Fairness Act (Tax)... Duh, you had the choice of... You know what I mean. Some pen pushers of dear state got idle because of you. Now we have to rig the govt spendings projection rationale further.

An Insisting On Going To Church on Sunday Tolerance Act (Tax). Nah, can't apply to temples. Only Churches or Mosques.

You know, Mr. Lieberman doesn't want to get assimilated with lower people than himself.


That sounds about right for sequels, no?

Heck, why not, while we're at it.

"Cyril" pronounced "see real". I code stuff.


"To study and not think is a waste. To think and not study is dangerous." -- Confucius

Cyril's picture

And they had the guts to call it..

And they had the guts to call it...

"Marketplace Fairness Act".


What a bunch of parasites.

Of leeches.

Of losers.

"Cyril" pronounced "see real". I code stuff.


"To study and not think is a waste. To think and not study is dangerous." -- Confucius

always the opposite

you can pretty much count on a bill being the exact opposite of what it is named. Oh, I think it was Ron Paul who said that....giving credit where credit is due

Cyril's picture

Indeed. Thanks for the refresher.

Indeed. Thanks for the refresher.

Oh yeah... "Patriot Act"... now I recall.

"Cyril" pronounced "see real". I code stuff.


"To study and not think is a waste. To think and not study is dangerous." -- Confucius