The measure, dubbed the Marketplace Fairness Act, has split the business community with fierce lobbying on both sides. President Obama gave the bill his backing before Monday's vote, and 26 Republicans supported it.
"We have heard overwhelmingly from governors, mayors and the business community on the need for federal legislation to level the playing field for our businesses and address sales tax fairness," Jay Carney, Obama's press secretary, said Monday.
Brick and mortar retailers and their business associations say Internet sellers have an unfair advantage, The Hill reported. But the Internet auction giant eBay is lobbying against it, saying it would hurt people running small online businesses, and the Securities Industry and Financial Markets Association and the Financial Services Roundtable say it would allow states to tax securities transactions.
Heritage Action, Americans for Prosperity and FreedomWorks, all conservative groups opposed to tax increases, have said they will score votes for the bill against lawmakers.
The Senate is expected to take a final vote on the bill later this week. If it passes, it will go to the House where the Republican majority is likely to kill it.