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Internet Sales Tax Bill Quashed For Now

Speaker of the House John Boehner, R-Ohio

Speaker of the House John Boehner, R-Ohio // J. Scott Applewhite/AP

A last-ditch push by about 30 Republicans to convince House Speaker John Boehner to allow lame-duck action on an online sales-tax measure failed Wednesday, but those attending the closed meeting said he is promising to revisit the issue early next year.

"We had a robust discussion, and everybody knows how everybody feels," said GOP Rep. Steve Womack of Arkansas as he exited the meeting, which he'd organized. Womack has taken the lead in the House on pushing for action on such a bill.

Last year, the Senate passed its version, called the "Marketplace Fairness Act." That bill would give states the authority to tax purchases from out-of-state online retailers with annual sales over $1 million. Backers of the legislation argue it would close an unfair loophole that benefits online giants over brick-and-mortar stores, and provide much-needed revenue to states.

Boehner had already let it be known that the House would not take up a similar measure during the lame-duck session, but the supporters weren't giving up easily. They tried to attach the bill to separate legislation extending a ban on Internet access taxes, and more recently were eyeing a government spending bill. Their efforts apparently met an end during the meeting with Boehner on Wednesday in his offices.

"We all agreed the Senate bill was not what we wanted," said Rep. Renee Ellmers of North Carolina after the meeting. She said Judiciary Committee Chairman Bob Goodlatte of Virginia talked about some ideas he had for a House bill.

Rep. Mark Amodei of Nevada said there was a promise that the issue will be considered early next year, he believed as early as February. A Boehner spokesman had no comment on the meeting.

Democratic Rep. Jackie Speier of California, a sponsor of the bill who was not in the meeting, expressed dismay at the Republican opposition. "You can't say you're for small business with one breath and then screw them with the second breath," she said.

Retail groups and state officials in both parties have been lobbying furiously for online sales-tax legislation, and will pick up the fight again next year. The supporters argue it's not a new tax—technically, people who order items online from another state are already supposed to declare the purchases on their tax forms, although few do.

Stephen Schatz, a spokesman for the National Retail Federation, said his group will still look for a vehicle to attach the measure to before the end of the year.

"If need be, we'll be back in the 114th [Congress] pressing this issue," Schatz said. "We're not going away."

But conservatives and antitax groups have decried the bill as a job-crushing measure. With Republicans now set to control both chambers, the online-tax advocates will face an even tougher challenge than they did this year. Conservatives are already pouncing on Boehner for promising to revive the issue.

"If Republicans want to create contrast with the president and appeal to hardworking Americans, they cannot spend 2015 carrying K Street's water," said Dan Holler, a spokesman for the conservative Heritage Action for America.

"Promising action on the Internet sales tax early next year signals they intend to carry on business as usual in Washington, the exact opposite of what voters demanded in November."

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