Internet Tax Pushes Customs Enforcement Bill to 2016… And an Uncertain Future

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When we last left the Trade Facilitation and Trade Enforcement Act, it had easily passed the US House of Representatives and was headed to the US Senate before what many thought would be a year-end vote.

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The TFTA was a longstanding priority for domestic steel as it included the ENFORCE Act, which provides the industry with new tools to address the evasion of anti-dumping and countervailing duty orders. Passage of the measure would also ensure that Customs and Border Protection officials investigate industry claims of AD/CVD evasion by set statutory deadlines.’

Blocked in the Senate

But it never passed the US Senate. What derailed this bipartisan-supported bill?

Source: Adobe Stock/Konstantin L

It’s not the Capitol Building’s fault that customs enforcement didn’t pass before the end of the year. It’s the people in it who were at fault. Source: Adobe Stock/Konstantin L.

After House and Senate lawmakers unveiled a compromise deal in early December, the one that the House passed, it went to the Senate and no vote was scheduled before the end of the year. The legislation also included an overhaul of the US Customs and Border Protection agency, as well as new protections for intellectual property and stronger tools for the government to crackdown on currency manipulation, but what bogged the agreement down was a fight over a permanent Internet sales tax ban, which was added into the conference report.

Senator Dick Durbin (D. – Ill.) threatened to use a procedural move to remove the internet sales tax ban provision. Durbin’s staff told The Hill that he had the votes to remove the ban from the customs enforcement package.

Durbin also told the Hill that if lawmakers tried to bring up the legislation it would have to overcome procedural hurdles, which could eat up the limited remaining time the Senate had. Yet, If Durbin had been successful in removing the Internet tax ban, it would have forced senators to send the customs bill back the the House, effectively scuttling the deal that brought it to the Senate in the first place and pushing both chambers past the deadline.

Where to Now for Customs Enforcement?

While passage in the new Congress could certainly still happen, losing the pressure of the year-end flurry of legislation doesn’t help the customs bill.

Some have suggested that passing the conference report, in its current form with the internet sales tax ban intact, would help ease passage of Trans-Pacific Partnership legislation, a priority of President Obama and the entire democratic party. As a bargaining chip, the bill’s passage, apparently, still has value. Will that happen in time, though, to help struggling steel, aluminum and other producers?

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The sausage making of the US congress has never been pretty, but such deals over competing priorities are exactly what has turned off so many American voters these days. Both sides should want to pass the TFTA because it’s vital to the survival of domestic industries and sets up a more fair playing field with cheap, illegally dumped imports. That this is being held up for a potential future internet sales tax, one that no one is even contemplating today, is just another low point for the gridlock we’ve come to expect in Washington, DC.

Follow Jeff Yoders on twitter at @jyoders19.

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