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Last-Ditch Push to Pass Marketplace Fairness Act in House Falls Short (Updated)

Ellmers was one of the bill's co-sponsors who lobbied leadership to act next year. (Bill Clark/CQ Roll Call File Photo)
Ellmers was one of the bill's co-sponsors who lobbied leadership to act next year. (Bill Clark/CQ Roll Call File Photo)

Updated 6:19 p.m. |  As House Republicans race against the clock to negotiate a government funding bill and a reauthorization of the Terrorist Risk Insurance Act, rank-and-file lawmakers lobbied leadership one last time to bring another piece of legislation on the floor before the year’s end: A bill that would boost the collection of sales tax on the Internet.  

Despite Speaker John A. Boehner’s insistence in October that he would not bring the so-called Marketplace Fairness Act up for a vote in the 113th Congress, advocates still huddled in the Ohio Republican’s office Wednesday afternoon to make their case.  

Ultimately, they weren’t able to win him over.  

“We had a robust discussion, and everybody knows how everybody feels,” said Rep. Steve Womack, R-Ark., who introduced the legislation, as he emerged from the closed-door gathering.  

He organized the meeting of roughly 30 House Republicans, among them co-sponsors of the bill and members of the Judiciary Committee that has jurisdiction over the measure. “We went in to say, ‘hey, we want to take some action,’ and [leaders] laid out what they’ve been doing,” said bill co-sponsor Mark Amodei, R-Nev., told reporters on his way out of Boehner’s office. “They said ‘we’re committed to getting it done, but not this year.'”  

When asked if he felt confident that Boehner, Judiciary Chairman Robert W. Goodlatte, R-Va., and other leaders were sincere in their stated commitments, Amodei said, “ask me that same question again in February.”  

Another co-sponsor, Rep. Renee Ellmers, R-N.C., echoed that “nothing is going to be done tomorrow, but in the new Congress.”  

“It was a discussion of those who are in support of the bill, and actually the Senate certainly had their bill that they passed, but we know there are reforms that need to be put in place,” she said.  

The House’s Marketplace Fairness Act, an iteration of which passed in the Senate in a 69-27 bipartisan vote last year, would allow states to force out-of-state websites to collect Internet sales tax.  

Brick-and-mortar retailers say the legislation would help level the playing field for them, and the Obama administration has lauded the measure as one that 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 conservatives on and off Capitol Hill have pushed back against the bill, particularly those who oppose new taxes.  

A House Judiciary aide for Republicans said in an e-mail to CQ Roll Call that the majority is “committed to working with the interested parties and stakeholders to find alternative solutions to the Internet sales tax issue that reflect the seven principles [Goodlatte] outlined previously.  

“Any solution must be simple enough for every business to use and fair, so that all businesses – whether online, brick-and-mortar, or brick-and-click – are on equal footing,” the aide continued. “It must also allow tax competition so that states are able to foster more economic growth by keeping their rates low.”  

At least two states could find themselves as indirect casualties of a failure to pass the Marketplace Fairness Act in Congress this month. In Maryland and Virginia, lawmakers tied their states’ transportation funding formulas to the expectation that the bill, or something like it, would get signed into law. Now, an additional 1.6 percent wholesale gas tax will go into effect on Jan. 1.
Steven T. Dennis contributed to this report.

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