Senate Bill Lets States Tax Internet Purchases

Attention online shoppers: The days of tax-free shopping on the Internet may soon end for many of you.

The Senate is voting on a bill today that would empower states to collect sales taxes for purchases made over the Internet. The measure is expected to pass because it has already survived three procedural votes.

The bill faces opposition in the House, where some Republicans regard it as a tax increase. But there is a broad coalition of retailers lobbying in favor of it.

Under current law, states can only require retailers to collect sales taxes if the store has a physical presence in the state. As a result, many online sales are tax-free, giving Internet retailers an advantage over brick-and-mortar stores.

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