Durbin Revives Bill to Bring Sales Tax to Internet

U.S. Sen. Dick Durbin (D-Ill.) says a compromise with House lawmakers ensures broad-based support for his bill to help brick-and-mortar retailers compete against out-of-state Internet sellers.

Internet sellers do not have to collect state sales taxes, except in the state in which they are they are physically located. That means brick-and-mortar stores at a disadvantage, as more and more shopping happens online.

Durbin told reporters that Illinois storeowners frequently tell him how they have been “devastated” by the tax advantage for internet retailers.

“Bob Naughtrip, who owned a store that was known as Soccer Plus in Illinois; he was losing large sales to local sports teams regularly, because his online competitors could offer a discount, regularly, of about $10,000. Eventually it put Bob out of business,” Durbin said. “This isn’t just happening in Illinois. It’s happening across the country.”

Under the Marketplace Fairness Act, online retailers would be required to collect sales and use taxes for any state that agrees to simplified administration and collection of those taxes. Online retail groups have said in the past they could accept such a measure.

Durbin said that by agreeing to some details of a House version of his Marketplace Fairness bill, he is able to unite a bipartisan group of lawmakers in both chambers of Congress behind his bill, which languished during the previous session.

Durbin’s bill has the endorsement of one major online retailer --- Amazon.