With the start of the new Congress, a bipartisan coalition showed the love to brick-and-mortar retailers on Valentine’s Day with the reintroduction of a modified e-sales tax fairness law, the Marketplace Fairness Act of 2013. The new act—supported by Senators Dick Durbin (Dem.-Ill.), Mike Enzi (Rep.-Wyo.), Lamar Alexander (Rep., Tenn., and Heidi Heitkamp (Dem.-S.D.) and Representatives Steve Womack (Rep.-Ariz.), Jackie Speier (Dem.-Calif.), John Conyers (Dem.-Mich.), Kristi Noem (Rep.-S.D.), and Peter Welch (Dem.-Vt.)—encourages online startups by raising the limit for online retailers to collect sales tax to $1 million. Previously the limit had been set at $500,000. If passed, and this version of the act tries to resolve many of the differences over previous iterations, the new act will level the playing field by forcing Amazon, Overstock, and other mega online retailers to collect sales tax.
The response from retail organizations has been overwhelming positive. American Booksellers Association CEO Oren Teicher’s comments were repeated by many: “We applaud the members of the bipartisan coalition for their leadership in introducing this important legislation and for building strong support across party line. The Marketplace Fairness Act will provide states with the authority to level the playing field for Main Street retailers, allowing them to compete in a free market. We believe the time has come for congress to pass sales tax fairness.”
The National Retail Federation, too, welcomed the reintroduction of the act, saying that the new bipartisan and bicameral bill demonstrates progress on moving sales tax fairness legislation this session. “For far too long local retailers and small business owners have been saddled with a competitive disadvantage with online retailers—sales taxes,” said NRF senior v-p for Government Relations David French.“While store owners collect and remit state and local sales taxes their digital competitors are off the hook—and benefiting because of it.”
In a letter to Senate and House sponsors of the act, Retail Industry Leaders Association executive v-p for public affairs Katherine Lugar, wrote: “We commend you on the reintroduction of the Marketplace Fairness Act. This common-sense legislation provides states the authority—if they so choose—to update their sales tax collection laws by requiring all remote sellers to collect sales taxes, relieving consumers of burdensome reporting requirements and creating a level playing field for all merchants without the heavy hand of government picking winners and losers in the marketplace.”
“It’s high time that Congress stand up for independent retailers and a level playing field," addedStacy Mitchell of the Institute for Local Self-Reliance. "For nearly two decades, Congress has undermined the viability of local brick-and-mortar businesses by conferring a major competitive advantage on their large online rivals. Exempting internet retailers like Amazon from having to collect sales taxes effectively gives these companies a 4 to 12 percent price advantage over local stores.Amazon now captures more than one-third of online shopping and ranks as one of the top ten retailers in the country. It hardly warrants special favors.”