U.S. Senate Approves Bid to Impose New Internet Sales Tax

Mike O'Brien

The prospect of a price rise in purchases made on the web has moved a step closer following the Senate’s overwhelming vote in support of an internet sales tax.

In a 75-24 vote, senators adopted an amendment to a Democratic budget resolution thatwould allow states to collect taxes from internet retailers. If such a law was brought in, it would allow states to levy taxes on some online retail purchases from businesses with more than $1 million in gross receipts.

Related: House Says Yes To Spending Bill

The vote came after some heavy duty lobbying from "old school" retail associations such as the National Retail Federation and the Retail Industry Leaders Association, which represent companies such as Walmart, Target, AutoZone, Best Buy, Home Depot, OfficeMax and Macy's.

They argued that online retailers have enjoyed an unfair advantage over bricks and mortar stores.

While the amendment is non-binding it does represent something of a important political milestone. The binding vote could come later this year by way of the Marketplace Fairness Act of 2013, Cnet.com reports.

Friday’s vote proposed internet sales tax came in for some hefty criticism from internet groups, but also from some conservatives who believe the law would be "bad news for conservative principles and the cause of limited government."

NetChoice, which represents Facebook, Yahoo, LivingSocial and AOL, described the move as "discouraging but not unexpected."

Given the wildly different tax laws from state to state, however, the implementation of the law would be nothing short of a bureaucratic nightmare.

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