Rep. Kristi Noem pushing for online sales tax bill in omnibus

Republican Rep. Kristi Noem, who is running for governor of South Dakota, is lobbying GOP leadership, senior appropriators and conservatives to attach her online sales tax bill to the government funding package, The Hill has learned.

Noem, a member of the tax-writing Ways and Means Committee, pitched the idea to members of the conservative House Freedom Caucus during their weekly meeting on Monday night, lawmakers said. She has been telling her friends in leadership that her bipartisan bill allowing states to require out-of-state online retailers to collect sales taxes should hitch a ride on the $1 trillion government funding omnibus.

During votes on Tuesday, Noem was buttonholing appropriators and handing them literature about her legislation. As he stepped off the House floor, Rep. John Carter (R-Texas), chairman of the Appropriations subcommittee on Homeland Security, said Noem had given him a one-page summary on her bill. He said he had not reviewed the issue yet and wasn’t ready to take a position.

Despite Noem’s aggressive efforts, some of her GOP colleagues poured cold water on the idea that such a divisive issue could be linked to the must-pass spending bill.

“Anytime you have an omnibus bill or [continuing resolution] CR, there’s always a lot of talk about what’s gonna get on it. But what actually gets on there is much smaller,” said Rep. Rodney Davis (R-Ill.), chairman of the Republican Main Street Caucus.

Noem’s push comes ahead of oral arguments in a Supreme Court case on the online sales tax issue next month. The court case centers on a law from Noem’s home state of South Dakota that requires certain out-of-state retailers to collect its sales taxes.

Noem was not immediately available for comment.

In a statement in January, Noem said the impending court ruling increases the urgency for congressional action.

“If the Supreme Court rules in South Dakota’s favor, it could become a marketplace free-for-all,” she said. “A South Dakota small business, for instance, could be forced to comply with 1,000 different tax structures nationwide without the tools necessary to do so. My legislation provides a necessary fix.”

Noem’s bill, called the Remote Transactions Parity Act, would allow states to compel out-of-state online retailers to collect their sales taxes if the states simplify their sales-tax laws.

The measure has about 50 co-sponsors, both Republicans and Democrats, including Budget Chairman Steve Womack (R-Ark.), GOP campaigns chairman Steve Stivers (R-Ohio) and Agriculture Committee Chairman Michael Conaway (R-Texas).

A similar bill passed the Senate in 2013.

But the legislation has been criticized by some GOP lawmakers, including House Judiciary Committee Chairman Bob Goodlatte (R-Va.), whose panel has jurisdiction over the issue. A House Judiciary aide said that Noem’s bill “is a solution that doesn’t resolve the issue of states regulating actions beyond their borders for the purposes of sales tax collection.”

Democratic lawmakers from states that don’t have sales taxes also have taken issue with online sales tax legislation.

Rep. Doug Collins (R-Ga.), a member of leadership, is opposed to tying the sales-tax bill to the omnibus.

“We need to have a bill that is worked out and voted on in committee,” said Collins, who serves on the Judiciary panel. “My staff says there are 50 things trying to catch a ride on the omnibus. At the end of the day, we’re trying to keep it as clean as possible.”