A prominent Republican lawmaker has introduced draft legislation to set up a framework for Internet sales taxes, aiming to end a long-running dispute between traditional retailers and online sellers.
Rep. Bob Goodlatte, R-Va., the chairman of the House Judiciary Committee, recently circulated the legislative language to members of the committee and key "stakeholders," a committee aide said.
The bill is "designed to level the playing field for traditional retailers, while keeping compliance simple for online sellers and ensuring states can collect sales taxes that are already due," the aide explained.
Under Goodlatte's plan, Internet sales would be taxed according to the rules of the state in which the seller was located but would pay at the tax rate of the buyer.
That policy would have the effect of imposing sales taxes on Internet transactions, which brick-and-mortar retailers have sought, without requiring states to tax businesses in other states, a logistically and legally tricky policy that some conservatives view unfavorably.
The draft indicates that state governments would distribute revenue using a national clearinghouse. For states that didn't participate in the clearinghouse, taxes would be levied based on the origin state of the seller.
The driving principles, the aide said, would be simplicity, especially for small businesses, and no regulation without representation.
Goodlatte's draft bill was welcomed by some retail groups that have backed separate legislation that would allow states to impose sales taxes on Internet sales or catalog sales by businesses with no physical presence in their state.
"Retailers are pleased that the process is advancing and we look forward to an open debate in the House aimed at ensuring that all retailers can compete on a level playing field," said Joe Rinzel, senior vice president for government affairs at the Retail Industry Leaders Association.