The goal of leveling the playing field between brick-and-mortar retailers and online retailers came a step closer Wednesday with the introduction of the Marketplace Fairness Act by a bipartisan group of ten senators led by Mike Enzi (R-Wyo.), Dick Durbin (D-Ill.), and Lamar Alexander (R-Tenn.). If enacted, states would be able to collect the sales taxes they are owed under current law from out-of-state businesses, rather than rely on consumers to pay those taxes to the states.
In a statement, Sen. Enzi said, “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 legislation exempts sellers who make less than $500,000 in total remote sales in the preceding year.
Both Amazon and the American Booksellers Association hailed the new legislation. “While we recognize that our continued campaign for a national solution to sales tax equity is far from over . . . 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.”
“Amazon strongly supports enactment of the Enzi-Durbin-Alexander bill and will work with Congress, retailers, and the states to get this bi-partisan legislation passed,” added Paul Misener, Amazon v-p of global public policy. “It’s a win-win resolution.” Amazon has staunchly oppossed state-by-state tax initiatives, but said it would back a national policy.
The National Retail Federation came out in favor of the bill. But not all retailers are supporting the legislation. In a statement that appeared in PC Magazine, eBay’s Ted Cohen, v-p for for government relations and deputy general counsel, said, “This is another Internet sales tax bill that fails to protect small business retailers using the Internet and will unbalance the playing field between giant retailers and small business competitors.”
A point stressed by both the ABA and Amazon is that the Marketplace Fairness Act will allow states to obtain additional revenue without new taxes or federal spending.