WASHINGTON (AP) — Advocates of an effort to help states collect taxes on Internet sales won a symbolic but important victory Friday as the Senate signaled solid bipartisan support for the proposal.
Senators voted 75-24 for a nonbinding measure that endorses giving states more power to collect existing sales taxes on purchases their residents make from out-of-state Internet companies.
Though the vote was merely a show of sentiment, the one-sided outcome showed that supporters of collecting the levies could prevail should the Senate consider binding legislation later this year.
A congressional battle over the issue has been simmering for years, pitting Internet companies against traditional retail stores.
Part of what is at stake is potential revenue for cash-starved state governments across the country. An estimated $20 billion in sales taxes go uncollected annually by out-of-state online merchants.
Supporters also argue that not collecting the levies is a competitive disadvantage for retail stores, which must collect local sales taxes.
One sponsor, Sen. Richard Durbin, D-Ill., said Internet sales taxes should be collected "so those local businesses will have a fighting chance."