Senators backing a bill to promote collection of sales taxes for online purchases may have to work around procedurally treacherous amendments.
A handful of amendments drafted by GOP Sens. Tom Coburn of Oklahoma and Rand Paul of Kentucky to the online sales tax collection bill would have the effect of killing the entire legislation should it ever reach the House. While the underlying measure doesn’t actually affect federal income taxes, the amendments do change the tax code. Such measures must begin in the House to avoid running afoul of the Constitution’s origination clause.
The underlying bill would not run into the “blue slip” problem, because it steers clear of federal tax changes.
However, Coburn has an amendment that would bar professional sports leagues from qualifying for tax-exempt status in the federal tax code. Coburn has criticized professional sports tax exemptions for the NFL, NHL and PGA Tour as a part of his annual “wastebook” of government spending. Coburn includes targeted tax provisions in that report.
“Taxpayers may be losing at least $91 million subsidizing these tax loopholes for professional sports leagues that generate billions of dollars annually in profits,” Coburn’s 2012 report said. “Taxpayers should not be asked to subsidize sports organizations already benefiting widely from willing fans and turning a profit, while claiming to be non-profit organizations.”
Other Coburn offerings involve federal employment of individuals with serious unpaid federal income taxes and the ability of upper-income taxpayers to claim deductions and credits. Those are proposals that may find more support in another context.
Senate Majority Whip Richard J. Durbin, one of the chief proponents of the sales tax legislation, warned he would seek to table (and thus kill) any of the extraneous tax amendments to prevent generating a House blue slip, a process by which the House effectively dismisses the bill without action because the Senate has infringed on that chamber’s constitutional prerogatives.
“Our bill does not change federal taxation, and we run [into] a procedural problem known as a blue slip problem if we amend the Internal Revenue code in the Senate and send that measure over to the House,” the Illinois Democrat said on the Senate floor. “If we end up voting before cloture, I’m going to suggest we table those, so we don’t go to the merits of any of those suggestions.”
Paul’s tax amendments take a different tack from Coburn’s. One would repeal the federal estate tax, while another would set a lower federal corporate tax rate than in current law.