Internet Sales Tax Bill Faces Tough Sell In House

FILE - In this Oct. 18, 2010 file photo, an Amazon.com package is prepared for shipment by a United Parcel Service driver in Palo Alto, Calif. Michigan state legislators in May 2013 are pushing measures to capture th... FILE - In this Oct. 18, 2010 file photo, an Amazon.com package is prepared for shipment by a United Parcel Service driver in Palo Alto, Calif. Michigan state legislators in May 2013 are pushing measures to capture the state’s share of hundreds of millions of dollars in annual taxes from Amazon, eBay and other Internet retailers. Under bipartisan bills being debated in the state House, Internet retailers would have to charge sales tax if they have distribution centers or warehouses in Michigan or are affiliated with in-state businesses whose websites steer customers to the larger retailer. (AP Photo/Paul Sakuma, File) MORE LESS
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WASHINGTON (AP) — Traditional retailers and cash-strapped states face a tough sell in the House as they lobby Congress to limit tax-free shopping on the Internet.

The Senate voted 69 to 27 Monday to pass a bill that empowers states to collect sales taxes from Internet purchases. Under the bill, states can require out-of-state retailers to collect sales taxes when they sell products over the Internet, in catalogs, and through radio and TV ads. The sales taxes would be sent to the states where a shopper lives.

Current law says states can only require retailers to collect sales taxes if the merchant has a physical presence in the state. As a result, many online sales are tax-free.

The bill faces opposition in the House, where some lawmakers regard it as a tax increase.

Copyright 2013 The Associated Press.

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