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Push for Federal Online Sales Tax Law in 2012

  • Dec 3, 2012 | Will Frei

UPDATE (12/06/12): The 2013 National Defense Authorization Act was approved by the Senate in a 98 to 0 vote on December 4, without the inclusion of the Marketplace Fairness Act. However, the movement to pass online sales tax legislation in the current Congressional session continues.

Will Congress pass an online sales tax law in the current lame duck session? It's possible, due to a push by Illinois Senator Richard J. Durbin (D) to attach the Marketplace Fairness Act to the National Defense Authorization Act for 2013. 

The Marketplace Fairness Act gives states the power to require remote sellers to collect state sales tax, even when the sellers do not have a physical presence within a state. States who wish to exercise that power must meet certain tax code requirements.

Durbin filed an amendment this past Friday to make the Fairness Act a part of the Defense Authorization Act, reports the Washington Times. Durbin's spokesperson, Christina Mulka said, "We are optimistic that once the Marketplace Fairness Act is brought before a vote, it will have enough support to pass."

Even if the Act does not garner enough votes, there is still a chance that we could see online sales tax legislation pass this year. Washington Governor Christine Gregoire (D) is working with Tennessee Governor Bill Haslam (R) to broker a deal for the passage of online sales tax legislation in the lame duck session, according to the Seattle Times. Last week Gregoire contended that such an agreement would have to be included in "fiscal cliff" negotiations.

Gregoire has in the past spoken out in favor of the Marketplace Equity Act, a House bill similar to the Marketplace Fairness Act (see an analysis of the differences here). If the former passes it will go to the House for a vote. If the latter passes it will be put to a vote in the Senate.

No one can say with certainty whether online sales tax legislation will pass this year. However, it appears momentum for online sales tax is growing.

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Will Frei
Avalara Author Will Frei
Will Frei covers sales tax news including best practices, legislation and sales tax technology. He is the Social Media Manager at Avalara.