Sales Tax Fairness Bills Include Small-Seller Exemptions

In October, the Marketplace Equity Act was introduced in the U.S House of Representative by Rep. Jackie Speier (D-CA) and Rep. Steve Womack (R-AR). In the U.S. Senate, the Marketplace Fairness Act was introduced last week by Senators Lamar Alexander (R-TN), Richard Durbin (D-IL), Mike Enzi (R-WY), Tim Johnson (D-SD), John Boozman (R-AR), Jack Reed (D- RI), Bob Corker (R-TN), David Pryor (D-AR), Roy Blunt (R-MO), and Sheldon Whitehouse (D-RI). 

Both bills would provide states with the authority to require remote sellers to collect and remit sales tax in the state. Importantly, both bills include small-seller exemptions. In the Senate bill, a store would have to have more than $500,000 in remote sales nationally to trigger nexus in a state other than its own. In the House bill, unless a store has more than $1 million in remote sales nationally (i.e. Internet, catalog, and/or toll-free sales, but essentially Internet sales), or more than $100,000 in remote sales into any one state, a seller is exempt from collecting and remitting sales tax in other states besides its own.

“The American Booksellers Association has always recognized that in any attempt to level the playing field with regard to the collection of Internet sales taxes there cannot be an undue burden placed on a bookstore that does a minimal amount of business out-of-state,” said ABA CEO Oren Teicher. “Our efforts have always stressed the need to maintain small business exemptions, and all the bills we are currently supporting include such provisions. ”

ABA continues to call on member booksellers to contact their senators in support of the Marketplace Fairness Act. “It is crucial that it get bipartisan support, so please contact your senator in support of the bill, especially if your senator is a Republican,” said Teicher. “And, please report back to us on how your lawmaker responds to your call or e-mail, so that we can follow up if necessary.” He noted that booksellers should e-mail David Grogan, ABA senior public policy analyst, with any information they receive from their senators’ offices.

To make booksellers’ advocacy outreach easier, ABA has prepared a template letter that booksellers can adapt and e-mail or fax to their senators. To access the letter, booksellers should go to ABA’s E-Fairness Action Kit [1], scroll down to their state, and click on the link for “Letter Supporting the Marketplace Fairness Act.”