U.S. Senate Passes Bill To Require Internet Merchants To Collect Taxes

WASHINGTON (CBSNewYork/AP) -- The U.S. Senate on Monday passed a bill that could end tax-free shopping on the Internet for many shoppers.

The Senate voted 69 to 27 Monday to pass the bill, sending it to the House, where it faces opposition from some lawmakers who regard it as a tax increase.

If passed, the bill would empower states to require businesses with more than $1 million in out-of-state sales to collect taxes for products they sell on the Internet, in catalogs and through radio and TV ads.

Under the legislation, the sales taxes would be sent to the states where a shopper lives.

Under current law, states can only require retailers to collect sales taxes if the merchant has a physical presence in the state. As a result, many online sales are tax-free.

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