WASHINGTON -- The House is not likely to consider a measure that would require retailers to collect and remit online sales taxes to local governments, supporters said after a meeting with House leaders Wednesday evening.
Members of Arkansas' delegation have supported the bill known as the Marketplace Fairness Act for years. It would allow states to choose to collect sales taxes from retailers that sell products online to people in that state even if the retailer doesn't have a physical presence there.
U.S. Rep. Steve Womack, a Republican from Rogers, said he called the meeting with House Speaker John Boehner, R-Ohio, to show how many members of Congress support it.
"I don't think anything is going to change necessarily, but what I want, my goal out of it, is to let the speaker hear not just from me, but from a number of other very conservative and very pragmatic members of the Republican conference who agree that we need to address the issue posthaste," Womack said before the meeting.
Several of the few dozen members who attended the meeting told the National Journal that Boehner promised to revisit the issue early next year. He had previously said he didn't plan to offer the bill before the House is scheduled to leave Dec. 11.
Womack said there is bipartisan support for the bill, which he expects to return in some form next year.
"We are prepared to make some changes to the present bill that serve to appease some of the objections from some of the rank-and-file members of our conference," Womack said. "We still have a whole bunch of others that are anxious to see this issue solved."
Womack and U.S. Reps. Tim Griffin and Rick Crawford co-sponsored the bill. U.S. Sens. Mark Pryor and John Boozman had sponsored the Senate version, which passed in 2013. U.S. Rep. Tom Cotton's staff has said he would consider the bill when it came up for a vote. He will replace Pryor in the Senate in January.
Supporters say it is a fairness issue because businesses that have physical locations in a state have to charge sales taxes, while out-of-state online retailers don't. That puts local businesses at a competitive disadvantage, and local governments lose the sales-tax revenue that could be used to provide public services, they say.
Opponents say a state shouldn't be legally allowed to require a business operating in another state to pay local taxes. Each state has different state and local tax rates, and it is burdensome to keep track, they say.
Retail and other business groups had rushed to persuade Congress to pass the measure in the few days left on the congressional calendar, even holding a news conference with state and local elected officials and business organizations in the U.S. Capitol Visitors Center on Wednesday.
Supporters will have to start from scratch with the new Congress in the new year. Several new members were elected with the support of conservative groups such as Heritage Action for America or Americans for Prosperity, both of which have said they oppose the bill.
National Retail Federation vice president Rachelle Bernstein was still optimistic before Wednesday's meeting, saying the issue was agreeing how to fix the problem, not whether to.
"We can't keep relying on a sales tax that has a great big loophole in it," she said. "Everyone understands the need to do something."
The U.S Supreme Court's 1992 decision in Quill Corp. v. North Dakota held that, absent a change in federal law, a state cannot make retailers that have no physical locations in that state collect sales taxes. Under current law, consumers are required to pay the sales taxes on online purchases, but few of them do.
"It is an existing tax, but yet Congress is enabling people to violate the law by not having an enforcement mechanism to get these things collected out of state," Womack said.
In a recent open letter to Boehner that appeared on the Arkansas Chamber of Commerce website and in Arkansas Business, chamber President Randy Zook said the bill would mean Arkansas could collect millions in taxes that are owed but not paid.
"Congress' failure to act on this important measure is a huge setback for Arkansas's businesses, for our retail and commercial industries, and is another blow by Washington to Arkansas's economy," he said.
A Section on 12/04/2014