Internet sales tax stalls in House

A bill that would require online retailers to start collecting sales tax has been slowed in the House of Representatives, but those in favor of its passage remain hopeful for its passage in 2014.

The bill was approved by the U.S. Senate in May, but has been held up in the House since that time.

"The Marketplace Fairness Act isn't going to happen next week or the week after, but I don't think the bill is sidelined indefinitely," said David French, senior vice president of government relations for the National Retail Federation.

"We see a path forward, and it's pretty obvious to us that this is still very much in play, but it's going to take a little time to get it across the finish line."

A recent Financial Times report said the bill, which passed in the U.S. Senate in May "has been sidelined indefinitely," pointing to the recent government shutdown and opposition from some conservatives complaining that it amounts to a new tax. It also said conservatives are reluctant to take on the issue before next year's elections.

But French said that reasoning is flawed and that he doesn't believe the bill has lost momentum, nor does he believe the current slate of representatives in the House will let it die.

The bill currently is held up in the House Judiciary Committee, which has other pressing issues on its plate, including immigration and patent reform, but French said that just means the process will take a little longer than some would like.

Despite some hesitance on the part of conservatives, the bill has garnered support not just from major brick-and-mortar retailers, such as Walmart and Best Buy, but from e-commerce giant Amazon. (Ebay and Overstock.com, on the other hand, have led the opposition.)

Furniture retailers, including Cardi's Furniture and Badcock Home Furniture & More, are pressing for passage, and e-commerce home furnishings giant Wayfair.com now can be counted in favor of the legislation as well, based on a statement co-founder and CEO Niraj Shah made to Furniture/Today.

"There is no doubt that one clear mandate on sales tax would be more effective for everyone," Shah said. "Federal legislation clarifying how and when sales tax should be collected and remitted would be helpful as online retailing continues to grow and evolve as an industry."

Shah went on to say that "this new source of tax revenue ... will also be helpful to states as they grapple with their various fiscal challenges."