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Boehner Kills Internet Sales Tax Bill (Updated)

Norquist and Sen. Rand Paul, R-Ky., were among those at a press conference opposing the Marketplace Fairness Act in June. (Tom Williams/CQ Roll Call)
Norquist and Sen. Rand Paul, R-Ky., were among those at a press conference opposing the Marketplace Fairness Act in June. (Tom Williams/CQ Roll Call)

Updated 5:55 p.m. | Tax-free Internet shopping is safe for now thanks to Speaker John A. Boehner.  

A bill granting states the ability to force out-of-state websites to collect Internet sales tax is dead, according to the Ohio Republican’s spokesman.  

“The speaker has made clear in the past he has significant concerns about the bill, and it won’t move forward this year,” said spokesman Kevin Smith. “The Judiciary Committee continues to examine the measure and the broader issue. In the meantime, the House and Senate should work together to extend the moratorium on internet taxation without further delay.” A bipartisan group passed the Marketplace Fairness Act out of the Senate last year on a 69-27 vote, led by Sens. Richard J. Durbin, D-Ill., and Michael B. Enzi, R-Wyo., but it has languished in the House.  

Backers hope to get the bill through during the lame-duck session , and aren’t yet throwing in the towel despite Smith’s comment.  

“The bill may change or even be folded into another piece of ‘must-pass’ legislation. The fight is far from over,” tweeted Stephen E. Schatz of the National Retail Federation. “We have about three weeks in the lame duck. Anything can happen. Retailers are all in to get this done this year.”  

“Our goal hasn’t changed and the bipartisan group of senators and the coalition will continue to work to find a path forward for it,” a Durbin aide told CQ Roll Call.  

The bill is strongly backed by national brick-and-mortar retailers, who have to collect sales tax on the web because they have operations in the states that collect sales taxes. They often are competing against web outfits that are located out of state and therefore are not required to collect sales tax under a Supreme Court precedent.  

It’s strongly backed by the Obama administration, and would provide billions for the coffers of states that levy sales taxes without actually requiring a tax increase. (Purchasers of items online are typically supposed to levy the tax on themselves and send a check to their state, but almost no one does).  

But it also has been opposed by some conservative and anti-tax groups, including Americans for Tax Reform and its president, Grover Norquist.  

If the bill isn’t revived, gas taxes will jump in at least two states — Virginia and Maryland — where lawmakers tied their transportation funding formulas to passage of the Marketplace Fairness Act or similar legislation.  

Judiciary Chairman Robert W. Goodlatte, R-Va., may soon be paying a little bit more at the pump on his way to and from Washington.  

The additional 1.6 percent wholesale gas tax would take effect Jan. 1.
Emma Dumain contributed to this report.

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