Small business owners push for online sales tax bill

Small business owners called out congressional Republicans on Tuesday for failing to back a proposal that would give states more power to collect sales taxes on online purchases, a key priority for many retailers. 

On a conference call, the owners urged Speaker John Boehner (R-Ohio), House Judiciary Chairman Bob Goodlatte (R-Va.) and Sen. Ted Cruz (R-Texas) to get behind the Marketplace Fairness Act, which would allow states to collect sales taxes from out-of-state retailers.

Donnie Eatherly, the owner of an auto parts distributor in Goodlettsville, Tenn., dubbed Boehner, himself a former small businessman, a “do-nothing Speaker” for declining to bring up the online sales tax legislation, which passed the Senate in May 2013.

“It’s time for them to move. The House has sat idly by and done nothing,” Eatherly said, adding about Boehner: “He’s claimed countless times to have run to stand up for small businesses.”

Over the last two years, Boehner and Cruz have often been at odds over how to proceed on fiscal matters like battling President Obama’s healthcare law.

But the two lawmakers are in broad agreement about the Marketplace Fairness Act. A spokesman for Boehner said this month that the Speaker would not bring the online sales tax bill up for a vote before the end of the year, instead saying Goodlatte’s committee needed more time to figure out how to proceed. Meanwhile, Cruz has long derided the proposal as an attempt to favor corporate big-box retailers over smaller Internet-based outfits.

Retail groups and a bipartisan group of lawmakers supporting the proposal have said it will correct an imbalance between brick-and-mortar and online retailers, and that Congress has had plenty of time to consider the matter. Currently, states can only collect sales taxes from businesses that have a physical location within their borders.

Supporters had hoped to attach the proposal to a less controversial measure that would extend a moratorium on taxes on Internet access, but have acknowledged that it could be a big setback if the proposal doesn’t become law this year.

On Tuesday, Rex Solomon, a Houston jeweler who said he supported Cruz in 2012, pushed back on the Texas senator’s argument on the online sales tax bill, recounting how customers have ordered from bigger diamond companies while in his store to avoid paying sales tax.

The Marketplace Fairness Act “does not support large corporations,” Solomon said. “In fact, it helps us.”