Sen. Crapo leans cautiously toward supporting internet sales tax

BOISE, Idaho (KBOI) -- Opponents say the internet sales tax law moving through the would actually create new taxes and put an unfair burden on businesses.

Idaho's senior senator Mike Crapo sees it differently.

"It is not as some believe a tax on internet sales, which I would oppose," Crapo said. "But it is a states rights bill because it allows states to develop their own policy with regard to sales tax on internet sales."

The Marketplace Fairness Act would allow state governments to force internet retailers to collect sales taxes from their customers and give the proceeds to state and local governments, just as brick-and-mortar retailers have done for decades.

Under current law, online retailers only charge sales tax if they have an actual store where the consumer lives.

Idahoans are supposed to report their online purchases and pay the tax on their state income tax returns...but few do.

States argue they collectively lost out on $23 billion in revenue last year because they couldn't tax internet sales.

And Sen. Crapo says Idaho's share of that money would greatly help with local tax relief.

But his support will depend on the final shape of the bill. He supports increases in exemptions for small businesses.