Washington, U.S.A. –The Senate Commerce Committee held a hearing on S. 1832, the Marketplace Fairness Act, a bill that levels the playing field between brick-and-mortar and Internet-only retailers. The Senate hearing featured testimony by Sens. Mike Enzi (R-WY), Dick Durbin (D-IL) and Lamar Alexander (R-TN), and caps a month of intense activity on Capitol Hill as Democratic and Republican lawmakers work to close the sales tax loophole that enables online sellers to bypass collecting state sales taxes.

“We are very encouraged by the growing momentum in Congress to fix the outdated and blatantly unfair sales tax system that is hurting brick-and-mortar retailers across the country,” said Michael Kercheval, president and CEO of the International Council of Shopping Centers (ICSC). “Today’s Senate hearing demonstrates that Congress is serious about getting the federal government out of the way so that states can enforce their own tax laws,” added Kercheval.

“This system doesn’t work for consumers. It doesn’t work for businesses. And it sure doesn’t work for state and local governments,” said Senator Durbin. Senator Enzi dismissed claims that the bill is tantamount to a new tax. “The bill does not tax Internet services.  The bill does not raise taxes€”it collects what is owed by the purchasing individual.”

“Critics of the legislation repeatedly claim that this constitutes a new tax for online retailers.  Nothing could be further from the truth, said Betsy Laird, ICSC senior vice president of global public policy. “It is not a new tax€”taxes are already due on online purchases in 45 states.  Online retailers would merely be required to collect and remit sales taxes just like local brick-and-mortar stores do,” added Laird.

If enacted, the legislation will save consumers the burden of self-reporting use taxes. According to a recent national survey conducted by ICSC, 86% of consumers prefer to pay sales tax on online purchases at the point-of-purchase rather than at the end-of-year on their tax forms.

Both S. 1832, the Marketplace Fairness Act and H.R. 3179, the Marketplace Equity Act, do what the Supreme Court suggested was fitting for Congress to do€”grant states the authority to compel sales tax collection on online purchases made by consumers in their state. It would end the competitive advantage pure e-retailers currently enjoy by not charging sales tax and improve the sales tax system to better reflect the realities of the 21st century marketplace.

ICSC has promoted sales tax fairness for over a decade, advocating that a “sale is a sale” regardless of whether the purchase takes place on Main Street, at shopping centers, via mail-order or over the Internet.

 

Image Courtesy of  nasa hq photo