Marketplace Fairness Act Reintroduced in Senate [5]

On Tuesday, March 10, a group of U.S. senators reintroduced the Marketplace Fairness Act, a bill that would level the playing field for Main Street retailers. The bill, which still enjoys bipartisan support, passed the Senate by a wide margin back in May 2013 [7]; however, with a Republican majority now in the Senate, the prospects for the bill’s passage are unclear.

The Marketplace Fairness Act of 2015 would give states the option to require out-of-state businesses, such as those selling online or through catalogs, to collect and use taxes already owed under state law, as is the case for local businesses. The bill is sponsored by Assistant Senate Democratic Leader Mike Enzi (R-WY) and Senators Dick Durbin (D-IL), Lamar Alexander (R-TN), and Heidi Heitkamp (D-ND), along with co-sponsors Senators Roy Blunt (R-MO), Jack Reed (D-RI), Bob Corker (R-TN), Sheldon Whitehouse (D-RI), and Angus King, Jr. (I-ME).

“The Marketplace Fairness Act is about supporting the jobs we have in our towns,” said Enzi in a statement. “It is about the people who are our neighbors who work in our local stores. Right now, thousands of local businesses are forced to do business at a competitive disadvantage because they have to collect sales and use taxes and remote sellers do not. The Marketplace Fairness Act would put Main Street businesses on a level playing field with online retailers. In 2013, the Senate passed this bill with bipartisan support. It’s time to give states the right to enforce their own laws without having to get permission from Washington.”

“Businesses in Illinois are looking for a level playing field,” said Durbin. “We came close in the last Congress, but the bill was never acted on in the House of Representatives. I hope that in the 114th Congress we can do what’s right for businesses in Illinois and around the country.”

Heitkamp noted that, for more than two decades, small businesses have been “waiting for Congress to act” on e-fairness. “The time to level the playing field for our local businesses is long overdue,” she said. “Last Congress, the Senate passed a bill to fix this problem and support small businesses, but the House failed to even bring it up for a vote for a year and a half. Hopefully that changes this year. There is no reason out-of-state sellers should have a leg up over our in-state businesses just because those transactions occur remotely — states must have the option to fix policies that discriminate against locally based mom and pop shops.”

With Sen. Mitch McConnell (R-KY) now the Senate Majority Leader, many predict that the bill will have a more difficult path to getting passed. While the past Majority Leader, Sen. Harry Reid (D-NV), was a proponent of the bill, McConnell opposes it, as reported by The Hill [8].

The Hill added that MFA sponsors may try to add the sales tax fairness measure to the extension of the Internet Tax Freedom Act, a measure barring taxes on online access that is set to expire at the end of September.

In the U.S. House of Representatives, Judiciary Chairman Bob Goodlatte (R-VA) has drafted sales tax legislation that would require states to change their sales tax collection systems from destination-based to origin-based in order to collect sales tax from remote sellers. Many e-fairness proponents, including the American Booksellers Association [9], have deemed this approach as highly problematic, if not completely infeasible.