Three years ago the U.S. Senate passed an online sales tax measure by a broad margin that included members of both parties. But no such bill emerged from the House, where Republicans disagree over the approach to taxing out-of-state online sales — and even whether it is necessary.
Maybe House members will feel new urgency in reaching consensus in the wake of a federal appeals court ruling this week upholding Colorado's attempt to collect online sales taxes. It has been clear for years that Congress needs to create a national framework allowing tax collection for out-of-state online purchases given their explosive growth and competitive advantage over local brick-and-mortar retailers. Now it's apparent that states have unexpected leverage of their own.
Amazon, the largest online retailer, seems to understand this as well as anyone and favors a national approach.
Online tax collection is not a partisan issue, as both Democrats and Republicans have floated proposals that would authorize it in different ways. With more states likely to imitate Colorado's model, it's time lay down national rules.
To be clear, the 10th U.S. Circuit Court of Appeals didn't say Colorado could require online retailers to collect sales taxes. That remains illegal when it involves companies that don't have a physical presence in the state, according to U.S. Supreme Court rulings.
With today's sophisticated software, it's no longer unfair to expect online retailers to be able to charge the appropriate tax for the location of a purchase.
The Denver Post