Senate delays action on Internet sales tax bill

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WASHINGTON (AP/WEAU) -- Senate Majority Leader Harry Reid says senators have reached a deal to delay voting on a bill to tax Internet sales until after senators return from a weeklong vacation.

Reid says the Senate vote on passage of the bill would be May 6.

A handful of senators from states without sales taxes were blocking the bill, which has widespread bipartisan support in the Senate.

The bill would empower states to require online retailers to collect state and local sales taxes for purchases made over the Internet. Under the bill, the sales taxes would be sent to the states where a shopper lives.

Brittany Doboszenski of Eau Claire says an online sales tax would make her want to stay away from online shopping.

"It would deter me to buy online because I already kind of don't just because it cost more to ship things," she said.

The bipartisan bill gives states power to force online retailers making over $1 million to collect state and local taxes.

Rep. Ron Kind (D-WI) said he would like to see that number rise to $5 million due to additional compliance costs that would be involved with Wisconsin's small businesses.

"We're really talking about large established businesses who are conducting a lot of sales over the internet that now escape the collection which isn't fair to the businesses that are physically present in our states and creating jobs and paying payroles which is vital to our economy," said Kind.

Sen. Ron Johnson (R-Wisconsin) said he agrees and believes thousands of hard-working small business owners in Wisconsin are competing at an unfair disadvantage against their competitors who don't have to comply with the same sales tax laws they do.

"Brick and mortar stores are forced to collect sales taxes that their online competitors do not. This vote ratifies an agreement among the states, improving compliance with laws that are already on the books. It also includes an exemption for companies that have out-of-state online sales of less than $1 million per year. As a result, this bill attempts to level the playing field without creating an undue compliance burden," said Johnson.

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