Battle rages over US online tax A drive by Walmart and other retailers for the US Congress to end tax-free internet shopping is heading for a collision with Grover Norquist, the anti-tax activist, as both sides compete to sway Republicans over the proposal. The House of Representatives is taking up the Marketplace Fairness Act, which allows states to collect sales tax from online retailers, following its passage in the Senate on Monday night by a bipartisan vote of 69 to 27. But its future in the lower chamber is uncertain, in large part because of the opposition of Mr Norquist, who is influential among the Republican majority. Retailers who back the proposal, including Walmart, Best Buy, Target, Home Depot, Sears and Amazon.com (which earlier opposed it but switched its position), were able to convince a majority of senators, including Republicans, that the legislation did not represent the introduction of a new tax, even though consumers will see taxes increase as a result of the law when they shop online. It was framed as a "fairness" issue because the legislation gives states the right to collect a sales tax that is already being levied on bricks and mortar shops but not online retailers. But legislators in the House have approached the proposal with more scepticism. "I think this will be stopped in the House," Mr Norquist told Fox News recently. This opens the idea that politicians in Alabama can tax businesses in other states . . . It's free money, they think. Bob Goodlatte, the Republican chairman of the House judiciary committee, which will have jurisdiction over the proposal and will hold hearings on it, has said he would consider the legislation but that it requires further simplification. In opposing the bill, Mr Norquist, known for his "no tax" pledge that nearly all Republican members of Congress have signed, has emerged as a powerful ally of eBay, the online auction website fighting the legislation. The company has called for a change in the legislation to protect "small businesses" with less than $10m in sales and fewer than 50 employees. Chris Krueger, an analyst at Guggenheim Securities, raised the prospect of the law passing by the end of the year to 40 per cent from 30 per cent before the Senate passed it, given the strong support it received. He said both of the provisions that Ebay is demanding, which would exempt smaller online retailers, would appeal to conservatives who worried that the bill placed onerous regulations on small businesses. "Even with these carve-outs, the bill will face continued hurdles in the House as it is viewed by many as a new tax on the internet," said Mr Krueger. The bill would enable states to collect the same sales tax from online shoppers that they collect from mall shoppers. The National Retail Federation, which lobbies on behalf of the biggest retailers in the country, hailed the passage of the legislation in the Senate as a "significant step for sales tax fairness." Sales tax is levied at a state level and ranges from 3 per cent to nearly 8 per cent in different parts of the US. According to a University of Tennessee study, the amount of sales tax that could have been collected from US ecommerce in 2012 was $11.4bn.