Senators, Stakeholders Optimistic About PITFA Deal Ahead of Thursday Vote on Customs Bill

McConnell's deal with Durbin didn't assuage Sen. Lamar Alexander, R-Tenn., who had planned to jointly challenge PITFA's inclusion in HR-644 with Durbin by raising a point of order that the PITFA language is outside the bill's scope. Alexander told us Wednesday he will still vote against HR-644 because of the PITFA language but no longer plans to raise a point of order on the Senate floor. “I don't think Washington has any business telling states what its tax structure should be,” he said, saying PITFA is now essentially “an unfunded mandate sponsored by many Republicans.” The planned Alexander-Durbin point of order challenge had led some PITFA supporters last week to believe a vote to overturn Durbin's challenge would likely be tight (see 1602040050).

Senate Commerce Committee Chairman John Thune, R-S.D., told us he's confident HR-644 will pass with PITFA intact, saying Republican support “looks good.” Thune told reporters Tuesday he believed Republican supporters of S-698 “believe that they’re going to get their opportunity to have their vote sometime later this year.” Thune said he hoped Senate Republicans “are going to refrain from points of order or procedural votes that might prevent [HR-644] from passing. It’s important we get this done.” Sen. Ron Wyden, D-Ore., who co-wrote the Senate PITFA equivalent Internet Tax Freedom Forever Act (S-431), said he wouldn't predict how a final vote on HR-644 might turn out but said he believes McConnell's deal with Durbin improved the bill's prospects. “Their agreement to bring [S-698] up in the Senate some time this year” is a positive step, he said.

Industry PITFA supporters said Wednesday they're cautiously optimistic McConnell's deal with Durbin will allow HR-644 to pass the Senate with PITFA intact but are more wary about what the deal means for Senate consideration of S-698. “We're certainly more optimistic about this than we were a week ago,” said R Street Institute Executive Director Andrew Moylan in an interview. Alexander's plan to vote against HR-644 despite McConnell's deal with Durbin is “disappointing, but I doubt that many other senators will follow him on this,” an industry lobbyist told us. Thune and Wyden are marshaling opponents of considering PITFA separately from S-698 to vote in favor of HR-644 “and I think it's likely there'll be a lot of pressure from others in leadership to get this done,” the lobbyist said.

Many industry stakeholders are pressing Durbin and McConnell to clarify the exact contours of McConnell's promise to allow Senate consideration of S-698 since their public statements on the deal have been “rather vague,” Moylan said. R Street Institute “understands the pressures that led to [McConnell's] concession to hold a vote [on S-698] at some point, but I think it's important given the many statements that Republican leaders have made in support of regular order and having a more robust process, that any vote [on S-698] should move through regular order,” Moylan said. S-698 and other similar Internet sales tax bills “have not had any direct committee action on the Senate side in recent years at all” and action via the Senate Finance Committee is needed before the Senate proceeds on S-698, Moylan said. S-698 critics also will be pushing to ensure Senate Republican leaders don't allow S-698 to be attached to any year-end must-pass bills, an industry lobbyist said.

Alexander, a main sponsor of S-698, praised McConnell for promising to allow consideration of S-698 despite his continued opposition to allowing PITFA in HR-644. S-698 “recognizes the authority of states to collect sales taxes from all of the people who owe them rather than just some of the people who owe them,” Alexander said. “That's a step forward.” Sen. Heidi Heitkamp, D-N.D., who was also a main S-698 co-sponsor, declined to say how she would vote on HR-644 but told us she's confident “we will win” on S-698 when it comes to the Senate floor.