Iowa Governor Calls for Federal Sales Tax Fairness

This week, Iowa Gov. Terry Branstad (R) urged his state’s U.S. senators to support the Marketplace Fairness Act, federal legislation that would allow states to require remote retailers to collect and remit sales tax in the state. Branstad is the second Republican governor in the past two weeks to urge Congress to pass sales tax fairness legislation. At a May 30 press conference, New Jersey Gov. Chris Christie publicly expressed his support for a federal solution, as reported by The Hill.

Branstad’s letter to the senators was sent two weeks after a coalition of 17 independent trade associations, led by the American Booksellers Association (ABA), wrote to the governor to urge him to support a federal solution.

According to The Hill, in Branstad’s letter to Sens. Chuck Grassley (R) and Tom Harkin (D), he noted: “I understand that the coalition supporting this legislation is now very broad, which gives me hope that, under your leadership, this legislation can be passed yet this year…. The Internet is now a robust, mature, and dynamic marketplace that does not warrant special protections. The application of sales taxes only to ‘brick-and-mortar’ retailers, many of which are small businesses, puts those very entities at a competitive disadvantage.”

“We are grateful to both Governors Branstad and Christie for joining the growing, and bipartisan, number of state governors calling for a federal solution to sales tax inequity,” said ABA CEO Oren Teicher. “We hope that other governors follow suit and express their public support for a federal solution to a problem that has plagued retailers across the country for more than a decade now. We are approaching a tipping point and the time for Congress to act in favor of fairness and equity is now.”

Jason Brewer, vice president of communications and advocacy for the Retail Industry Leaders Association, told The Hill that the growing support among governors “adds to the pressure for Congress to act” and noted “it bodes well for us that more governors are encouraging their delegations to support the bill.”

The U.S. House of Representatives is expected to hold a hearing on sales tax fairness legislation, the Marketplace Equity Act, sometime “next month,” The Hill reported.

Notably, Sen. Harkin is already on board with sales tax fairness. “It is simply unfair for some retailers to be responsible for proper local taxes and for others to avoid that responsibility, which would deny state and local governments their properly owed funds,” he noted to The Hill in a statement. “I have long supported requiring remote sellers to collect sales taxes, and I am hopeful the bill will pass Congress this year.”