“Most small business people don’t want a government handout,” said Sen. Durbin. “They don’t want special treatment. They just want to be able to compete fairly against other businesses. That’s why I have worked with Senators Enzi and Alexander to introduce the Marketplace Fairness Act — a bipartisan bill to level the playing field for local Main Street businesses.”
Said Enzi: “For over a decade, Congress has been debating how to best allow states to collect sales taxes from online retailers in a way that puts Main Street businesses on a level playing field with online retailers. This bill empowers states to make the decision themselves. If they choose to collect already existing sales taxes on all purchases, regardless of whether the sale was online or in store, they can. If they want to keep things the way they are, it’s a state’s choice.”
The American Booksellers Association hailed the bill as an important step toward a national sales tax fairness solution and is urging its members to write to their senators in support of the bill. (Template letters, which booksellers can adapt and e-mail or fax to their senators, are available in ABA’s E-Fairness Action Kit). “While we recognize that our continued campaign for a national solution to sales tax inequity is far from over, important legislation has now been introduced in the Senate and the House of Representatives, and, for the first time in a long time, there has been significant movement in Washington in the fight for e-fairness,” said ABA CEO Oren Teicher. “It is crucial that we take advantage of this window of opportunity.”
In a letter to Sen. Durbin, dated November 8, Teicher stated that ABA strongly supports the Marketplace Fairness Act:
“We firmly believe the Marketplace Fairness Act would help to level the playing field by authorizing states to require out-of-state retailers to collect and remit sales tax to the state for purchases made by their residents. Moreover, it would assist the states in collecting approximately $23 billion in uncollected state sales taxes that are currently due on Internet and catalog sales.
“As we know you understand, the Marketplace Fairness Act does not, in any way, impose a new tax. This is an issue of state rights and the federal government providing states with the authorization to require remote retailers to collect and remit sales tax in the state — rather than requiring consumers to declare the use tax on their income tax statements. Importantly, this legislation does not compel any state to join. However, any state that chooses to adopt this system would then have the authority to require online retailers to collect and remit sales taxes.” (Read Teicher’s letter in full here.)
Teicher said that ABA and its membership were thankful to the bipartisan group of senators who co-sponsored the legislation. “We are pleased to see Democrats and Republicans come together in support of Main Street businesses,” he said. “We have always believed that the issue of sales tax fairness went beyond partisan politics — as we’ve always stated, this is an issue of simple fairness and government not being in the business of picking winners and losers in the marketplace. Clearly, the strong bipartisan support for this bill shows this to be the case.”
Also coming out in support of the bill was Amazon.com. In a statement issued today, Paul Misener, Amazon.com vice president, global public policy, said, “Amazon strongly supports enactment of the Enzi-Durbin-Alexander bill and will work with Congress, retailers, and the states to get this bipartisan legislation passed.”
“We are pleased to hear about Amazon’s support,” said Teicher. “Despite its long record of vigorously battling sales tax equity, we welcome Amazon to the fold. As the bill moves through the legislative process, we hope we can continue to count on Amazon’s support.”
Importantly, the Marketplace Fairness Act, like its House counterpart, the Marketplace Equity Act, has a small-seller exemption. In the Senate bill, a store would have to have more than $500,000 in remote sales nationally to trigger nexus in a state other than its own.
In the House bill, unless a store has more than $1 million in remote sales nationally (i.e. Internet, catalog, and/or toll-free sales, but essentially Internet sales), or more than $100,000 in remote sales into any one state, a seller is exempt from collecting and remitting sales tax in other states besides its own.
The House bill provides states with the authority to require remote retailers to collect and remit sales tax but does not in any way mandate that they do so. The Senate bill authorizes the 24 states that are part of the Streamlined Sales and Use Tax Agreement to require remote retailers to collect and remit sales tax and provides the remaining states with the authority to do so as well but, like the House bill, does not mandate they do.
ABA is asking its member booksellers to urge their senators to support the Marketplace Fairness Act. To make their advocacy outreach easier, ABA has prepared a template letter that booksellers can adapt and e-mail or fax to their senators. To access the letter, booksellers should go to ABA’s E-Fairness Action Kit, scroll down to their state, and click on the link for “Letter Supporting the Marketplace Fairness Act.”