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Internet Sales Tax Bill Dealt a Blow; Wyden Cheers

(Bill Clark/CQ Roll Call)

Majority Leader Harry Reid is quietly stepping back from his intention to bundle an Internet tax moratorium with a more contentious proposal to allow states to collect online sales taxes, at least for now.  

The Nevada Democrat had said July 16, "I think it's fair to say the two are going to be together." The move, backed by Senate Majority Whip Richard J. Durbin, D-Ill., would have constituted a run around Finance Chairman Ron Wyden, D-Ore., who opposes the legislation known as the Marketplace Fairness Act.  

But, CQ Roll Call's Alan K. Ota reported that as of Tuesday, the plan had changed:  

Senior Democratic aides confirmed on Tuesday that Reid planned to move in September on the short-term extension of the soon-to-expire Internet access tax moratorium (PL 110-108). "It will extend the Internet Tax Freedom Act until early 2015. We are focusing on what we can get done," said one aide.
Wyden praised the apparent move, saying it "reflects a growing awareness that as written, the two bills contradict each other."  

Oregon is one of several states without a state-level sales tax. Businesses in those states selling to customers in states with sales taxes would have to start collecting those taxes.  

"There's probably going to be a shadow industry just cropping-up to do all the book-keeping. So, I think the decision ... reflects a growing awareness that Internet tax freedom, as has been written originally by Congressman Chris Cox, he was then my Republican and myself, is something that contradicts marketplace fairness as written," Wyden said. "There may be ways to deal with that."