Congress Hears Testimony on Online Sales Tax Bill


The House Judiciary Committee heard testimony Tuesday on a hotly-contested bill that would allow states to impose an online sales tax for all businesses. Some small brick-and-mortars argue the bill would even the playing field for them with major retailers such as

The Online Marketplace Fairness Act actually reverses a 1992 loophole, which states online merchants are not required to collect sales taxes in states where they do not have a physical establishment, according to This two-decades-old Supreme Court decision can be altered if Congress were to step in. The bill was introduced in 2011 by Rep. Steve Womack (R-AK) and Rep. Jackie Speier (D-CA).

States charge sales taxes, in theory, however many Web retailers don’t actually collect them, and consumers certainly don’t step up to pay them. The debate has heated up with so many states falling short of their budget expectations, with supporters like New Jersey Gov. Chris Christie arguing that forcing online retailers to charge the sales tax can help to plug the hole.

FOX Business reported the National Conference of State Legislatures estimates the new annual state revenue could total up to $23 billion if online businesses were to implement a sales tax.

There is no set date as of yet for a vote on the bill.