Senate Passes Internet Tax Bill

The Senate passed a bill Monday that would subject most online shopping to state sales taxes, the Associated Press reported.

Currently, states can only require retailers to collect sales taxes if the store has a physical location in the state.

The measure would give states the power to require businesses to collect taxes for products they sell on the Internet, and the sales tax would be then sent to the state where the shopper lives, according to AP.

The measure now moves to House, where it faces opposition from some conservative lawmakers who view it as a tax increase, AP said.

The bill exempts businesses with less than $1 million in annual online sales, but eBay wants to exempt businesses with up to $10 million in sales or fewer than 50 employees, AP said.

The bill is supported by Amazon.com, which is building warehouses in more states to offer same-day delivery. That would require it to collect sales taxes anyway, Bloomberg News reported.

Companies that provide same-day delivery service are seeing higher revenue in part because of the surging demand from retailers offering same-day delivery, such as Wal-Mart Stores and Amazon.com.