The United States Senate voted Monday evening to pass the Marketplace Fairness Act, bipartisan legislation that would close what is known as the “Amazon loophole” by giving states the authority to collect sales taxes on online purchases even when internet retailers aren’t based within their borders. That loophole gives online sellers an advantage over brick-and-mortar retailers that have to collect sales taxes on most purchases.

The legislation passed 69-27.

The new rules would apply to all retailers with sales exceeding $1 million a year should it pass the House of Representatives, where it is expected to face opposition. Amazon, the largest online retailer, now supports it, but eBay and other online outlets are opposed. eBay sent 40 million emails to its users in April protesting the legislation.

“The contentious debate in the Senate shows that a lot more work needs to be done to get the Internet sales tax issue right, including ensuring that small businesses using the Internet are protected from new burdens that harm their ability to compete and grow,” Brian Bieron, eBay’s Senior Director of Global Public Policy, said in a statement. “eBay will continue to focus on bringing greater balance to the legislation by protecting small businesses with less than $10 million in sales or fewer than 50 employees.”

Despite those concerns, the closure of the loophole will have big benefits for states and taxpayers. States have lost billions of dollars to the loophole at a time when tight budgets have forced them to cut back on education and other programs. Low-income taxpayers, meanwhile, will benefit because closing the loophole will make state sales taxes slightly less regressive. However, raising the exemption, as eBay wants to do, would significantly reduce those benefits, which have been sought by governors, including Republicans, across the country in recent years.

The Senate moved a step closer to giving states the authority to collect sales taxes on online purchases Monday, voting 74-20 to begin debate on the Marketplace Fairness Act. The bill, which would close the so-called “Amazon Loophole” that allows online retailers to avoid collecting sales taxes from purchasers in states where they do not have a physical presence, has broad bipartisan support among both conservatives and liberals, and the voting margin nearly mirrored a symbolic resolution on the measure earlier this year.

But even though Amazon, long the beneficiary of the loophole, now supports the legislation for its own reasons, other online retailers are mobilizing against it. eBay, the online auction and retail site, sent emails to 40 million of its users over the weekend, urging them to voice opposition to the bill, as Reuters reports:

The e-commerce giant plans to send emails from Donahoe to at least 40 million eBay users, including most sellers on the marketplace. The first messages were sent out Sunday morning.

In the emails, [eBay CEO John] Donahoe said the legislation, known as the Marketplace Fairness Act, unfairly burdens small online merchants and asked eBay users to send an email message to members of Congress asking for changes.

The current legislation, introduced by Wyoming Sen. Mike Enzi (R), exempts companies with less than $1 million in annual out-of-state sales, a threshold eBay says would hit many of its online merchants. It wants to expand the exemption to companies with less than $10 million in out-of-state sales.

Raising the exemption would largely defeat the purpose of the legislation, though. Because they don’t have to collect sales taxes in most states, online retailers have a built-in advantage over brick-and-mortar retailers that have no choice — and that advantage exists for no particular reason. And businesses that would be exceed the $1 million sales exemption, meanwhile, are hardly small-time retailers. Raising the exemption would also put a dent in the revenue generated by closing the loophole, estimated at as much as $11 billion for states that have faced crunched budgets in the aftermath of the Great Recession and have been forced to cut spending as a result. And while sales taxes are inherently regressive, the Marketplace Fairness Act would make the tax code slightly more progressive, since many low-income families don’t have the option to shop at online retailers that don’t currently levy sales taxes.