Senate Passes Online Sales Tax Bill

Tyler Durden's picture

As previewed previously, one half of the hurdle to enforce a universal online US sales tax has now been crossed, with the Senate voting moments ago to pass a Wal-Mart backed bill 69-27 allowing states to collect taxes on out of state Internet and catalog sales. The bill would end the era of tax-free Internet shopping. During the debate, senators offered examples of consumers who examine products in stores and then shop online to avoid paying sales tax. The pretext? Why fairness of course.  “This bill is about fairness,” said Senator Mike Enzi, a Wyoming Republican and co-sponsor of the measure. “It’s about leveling the playing field between the brick-and-mortar and online companies.”

However, while the bill's success in the Senate was given, its passage in the House appears far more problematic. As Bloomberg reports, "the bill goes to the Republican-controlled House of Representatives, which probably won’t act quickly or pass a measure in the same form as the Senate. Representative Bob Goodlatte, a Virginia Republican and chairman of the Judiciary Committee, has said that while he wants to address the issue, he is concerned it would create complexity for businesses and make them vulnerable to audits by multiple states."

In other words, the House's definition of fair appears slightly off from that of the Senate.

It also differs from that of online mega retailer Amazon, which apparently has decided that if it can't fight them, to at least join them, and make the life of all other online retailers who never lost as much money as it did, or had nearly as horrible operating margins as AMZN, let alone a #Ref! P/E multiple, living hell and if possible crush and bankrupt them by any ways possible just so AMZN could finally lever up its business model of becoming the biggest at any and every price.

The measure, supported by the Obama administration, attracted a coalition of backers including Best Buy Co. (BBY), Inc. (AMZN) and shopping mall owners. Amazon, the largest Internet-based retailer, is expanding into more states to speed delivery, which means it will pay taxes anyway.

And why not: AMZN benefited from  a no sales tax policy for decades. Now that it believes it is large enough and has enough scale (if no actual profit) it may as well join the dark side.

Luckily, there are those who still believe that handing over even more private sector cash to the government to burn at will is not the best option.

Opponents maintained that the bill would unfairly burden small businesses with paperwork and audits, create a tax advantage for foreign sellers and potentially allow state-level transaction taxes. Detractors included anti-tax groups, direct marketers and senators from states without sales taxes.


I fear that what we’re going to do is crush a lot of those start-ups, a lot of those small businesses,” said Senator Ron Wyden, a Democrat from Oregon, which doesn’t have a sales tax.

Of course you are: that is what Amazon, Best Buy, and Wal Mart are hoping for. And since by passing said bill it merey makes government even bigger, one can bet their bottom untaxed dollar, that it is only a matter of time before the House also passes a version of the bill.

Remember: it's only fair.

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Jay Gould Esq.'s picture

The true danger is when liberty is nibbled away, for expedients, and by parts.

- Edmund Burke

krispkritter's picture

All your Internets is belong to us...(pricks!)

Enough ain't enough until enough is enough! Fuck you Uncle Sam...

Fukushima Sam's picture

This will be another hit to the USPS revenue...

TwoShortPlanks's picture

Fuck the Free World; I want Perma-Sales!

nmewn's picture

DOA in the House...just sayin.

CH1's picture

This is how fascism works.

american eyedol's picture

someone needs to tax congress please

Triggernometry's picture

If the IRS can already snoop into our shopping records, isn't this moot?

Stackers's picture

Uh, doesnt the Constitution clearly say all tax bills must originate in the House of Reps ????

grunk's picture

You read the Constitution. You're now on a watch list somewhere.

whotookmyalias's picture

The solution to not enough government is always more government.  Love how Amazon opposed state tax until they were forced to collect it and now they think it's a great idea.

Supernova Born's picture

Make it only apply to businesses with locations in more than one state, or exempt small business under a certain size.

Poison Pill for Amazon et al.

dryam's picture

Weird, I never heard this "fairness" argument with the TBTF banks.

nmewn's picture

Yep, owe your soul to the company store & .gov always gets their cut.

oddball's picture

So are you saying the House has our backs?  hahahhaha America is screwed.  At least we know the monkey court will side for the people.  hahahhahahha





Freddie's picture

You think? The Senate needs to have term limits (one term max) and 3 year not 6 year terms. The House always fears elections. I f***in hate the scum in The Senate.

The whole thing (congres, presidency, SCOTUS, everything) is joke anyway so I am not sure why I even bother.

nmewn's picture

The senate bill is dead this close to mid-terms, it will be bottled up in committee.

"House Speaker John Boehner plans to send the bill to the House Judiciary Committee, a senior Republican aide said. That will mean hearings ahead. The Senate uncharacteristically bypassed this step.


Judiciary Committee Chairman Robert Goodlatte, a Republican, has reservations about the legislation, including its complexity and potential impact on small businesses, a spokeswoman said.


Goodlatte has yet to schedule any hearings on it, she said."

Who woulda thunk the internet high tech crowd, rascally TPer's and republicrats had so much in common inside the House ;-)

Freddie's picture

I hope Amnesty is dead too. These evil f***s in Washington Dc are evil scum.

Mr Nice Guy's picture

An incremental and less draconian approach than the one you suggest might be feasible, e.g., begin by term-limiting the Senate to no more than three consecutive generations.

Disenchanted's picture

@ nmewn

re: "DOA in the House...just sayin."


Weren't you also one of those who thought ObamaCare was DOA at SCOTUS...


LOL! @ you still thinking one political/ideological faction is better than the other.

nmewn's picture

Yes I was. Who would have ever thought Roberts would side with an evil old stooped over bitch like Ginsberg. But it still doesn't make it proper or fair to force anyone to buy something under threat of law does it?

Hitler had laws and judges too.

Was his faction better than any other? ;-)

Disenchanted's picture

If I may be so bold, here's a suggested reading assignment for ya:

Our American Pravda
KnightTakesKing's picture

Wow, good stuff. Thanks for the link...

Disenchanted's picture

You're welcome. This is the part(and especially that which I've bolded) of that I thought applicable to my exchange with nmewn:



A likely reason for this wall of uninterest on so many important issues is that the disasters involved are often bipartisan in nature, with both Democrats and Republicans being culpable and therefore equally eager to hide their mistakes. Perhaps in the famous words of Benjamin Franklin, they realize that they must all hang together or they will surely all hang separately.


We always ridicule the 98 percent voter support that dictatorships frequently achieve in their elections and plebiscites, yet perhaps those secret-ballot results may sometimes be approximately correct, produced by the sort of overwhelming media control that leads voters to assume there is no possible alternative to the existing regime. Is such an undemocratic situation really so different from that found in our own country, in which our two major parties agree on such a broad range of controversial issues and, being backed by total media dominance, routinely split 98 percent of the vote? A democracy may provide voters with a choice, but that choice is largely determined by the information citizens receive from their media.


Most of the Americans who elected Barack Obama in 2008 intended their vote as a total repudiation of the policies and personnel of the preceding George W. Bush administration. Yet once in office, Obama’s crucial selections—Robert Gates at Defense, Timothy Geither at Treasury, and Ben Bernake at the Federal Reserve—were all top Bush officials, and they seamlessly continued the unpopular financial bailouts and foreign wars begun by his predecessor, producing what amounted to a third Bush term.


Consider the fascinating perspective of the recently deceased Boris Berezovsky, once the most powerful of the Russian oligarchs and the puppet master behind President Boris Yeltsin during the late 1990s. After looting billions in national wealth and elevating Vladimir Putin to the presidency, he overreached himself and eventually went into exile. According to the New York Times, he had planned to transform Russia into a fake two-party state—one social-democratic and one neoconservative—in which heated public battles would be fought on divisive, symbolic issues, while behind the scenes both parties would actually be controlled by the same ruling elites. With the citizenry thus permanently divided and popular dissatisfaction safely channeled into meaningless dead-ends, Russia’s rulers could maintain unlimited wealth and power for themselves, with little threat to their reign. Given America’s history over the last couple of decades, perhaps we can guess where Berezovsky got his idea for such a clever political scheme.


nmewn's picture

Certainly hasn't escaped my attention that both parties are different shades of grey.

But you are no different from me, just another shade of grey, that we (you and I) can somehow get over it, even when we don't always see it the same way, says something we both want.

If a new party is to be found among the likeminded (though not always same minded people) there will have to be some hard and fast absolutes we agree on.

Two of mine are...the government can only spend what it takes (recognize the word takes) in taxation and absolute recognition of firearms as a civil right, just as intended when this thing was setup.

These are both constant attacks on our present freedom & liberty and our childrens future which are used to divide us.

oddball's picture

More just at this point.  Where is my fucking chainsaw?

Never One Roach's picture

You're going to see more "Flea Markets" and things like Farmers' Markets but not only for fruits but also for other items just like in Europe and in most 3rd world countries where people set up a booth and sell everything from shoes to computers to jewelry and books. The wealthy will still buy at the higher prices online but for many people the only way to, lets say buy your kid a new iPad or Chaps sweater, will be to go to one of these 'Flea Markets' and barter or pay. Maybe pawn shop business will be the place to be in the future.  I don't know. Wasn't there an article on ZH today saying 22% of the EU economy is "underground?" There's a reason for it. Could it be their 18% VAT?


I see a serious, tougher, slog ahead for most Americans.....just as El Erian said last week.....but saying the obvious.

TeMpTeK's picture

sales tax is levied on the seller for the privilige of doing business "Within" a particular jurisdiction.. How the fuck can another taxing authority from another state go after a seller who isnt in their jurisdiction?? Every online seller will have to keep track of tax rates for 9,000 taxing jurisdictions in the US...... Hopefully this goes over like Real ID.. Where everyone just looks up at the Feds and says... Fuck You!

yogibear's picture

Cash.  No paper trail.

Town Crier's picture

Why is it the government's job to run around "leveling the playing field" anyway?

Professorlocknload's picture

Because the gumnut owns both the game and the field it's played on.


e-recep's picture

then try your chances and see who owns what.

HardAssets's picture

"Why is it the government's job to run around "leveling the playing field" anyway?"

They create level playing fields when they drop daisy cutters and napalm - - - they are very experienced in this kinda thing.

Never One Roach's picture

I bet Al Gore regrets inventing the internet now.....



buyingsterling's picture

But it only applies to businesses with sales over $1 million per year, you know, 'the rich'.

1. It will soon apply to all, since those business will now join Walfart and Worst Buy in lobbying for it to hammer everyone.

2. The online environment is one with low margins, just about anyone making a half-way decent living online has to sell $1 million+ to get by.

3. It will in time apply in all places to gold and silver, since exluding them would be 'unfair' (probably one of the most evil and mis-used words every coined).

4. The internet is the last relatively free thing on the planet. This was inevitable. Bring the crash, bring the reset, hang the responsible.

CH1's picture

The internet WAS the last relatively free thing on the planet.

Fixed it for ya.

Bitcoin is now a relatively free thing, and hopefully 3D printing joins it.

Private wifi Internet is easy and cheap to build, but it requires people to ACT, rather than spending the whole of their lives complaining.

TwoShortPlanks's picture


"But it only applies to businesses with sales over $1 million per year, you know, 'the rich'."

LOL...yeah, the people who invest in industry! This means that banks must be lenders across the board since they're so cashed up these days....The West is rapidly becoming a 'Banking State'.

EDIT: an 'Even-More-Banking State'

HardAssets's picture

I heard a very interesting interview on recently. The particular speaker had found a very old book by an American who had taken part in the Boston Tea Party. This happened in 1773 when a bunch of Americans (known as the Sons of Liberty) dressed up as Indians and dumped tea into Boston harbor. Well we've been taught in the public 'schools' (at least years ago when they actually taught history) that the Americans were upset at having to pay the tax. Some have said the amount was insignificant and was to pay for the upkeep of the defense of the colonies.  It seems the true story was that the tax was enacted at the request of those who ran the biggest multinational corporation of the time, the British East India company. They wanted the tax to be levied in order to drive their American competitors out of the tea business. The Americans were angered at their  continued exploitation by the big government/big corporate insider merchantilism/cronyism system that they found themselves subjects to. For some reason those Americans didnt think their ultimate purpose in life was to be hosts to the parasites.

Sound familiar ?

HulkHogan's picture

I love Everyone should give them a look and then donate some money. I am only a fan, and not involved with the site in any way.

Freddie's picture

This happened in 1773 when a bunch of Americans (known as the Sons of Liberty) dressed up as Indians and dumped tea into Boston harbor.

Sounds like a false flag operation.

Could you imagine today?   All of Boston would be shut down, people forced to stay in their home under martial law with people forced to stay inside.   The Sons of Liberty would be arrested as terrorists and they would also be fined millions by the EPA for poisoning the harbor.

knukles's picture

Poisoning Boston Harbor

NeedtoSecede's picture


Laughing my ass off sitting on an airplane. Freddie, that was an all-timer! Well done sir!

Freddie's picture


Have a safe flight.  I used Bongo (?) on a flight once to connect to my desktop at the office using LogMeIn.  It was crazy fast like I was sitting at my desk.  I had to contort like a pretzel to see my laptop in coach seats.   The AH in front wanted to snooze and put their seat back.  LOL!   Why can't I be a bankster with my own jet. 

I am done with being groped by TSA and being irradiated like dead chicken at their checkpoints.  F them!  Safe travels.  ;-)