Push to Pass Federal Sales Tax Fairness Legislation Heats Up

Booksellers urged to call their U.S. House reps

 This week, the push for federal sales tax fairness bills in both the U.S. House of Representatives and Senate picked up momentum following the Fourth of July Congressional break.

On Tuesday, July 10, it was announced that the House Judiciary Committee will hold a hearing on the Marketplace Equity Act (H.R. 3179) on July 24. The hearing — a crucial first step in moving the bill forward in the House — will provide supporters with the opportunity to explain why sales tax equity is so important.

Also on July 10, in the Senate, Senators Richard Durbin (R-IL), Michael Enzi (R-WY), and Lamar Alexander (R-TN) filed the Marketplace Fairness Act (MFA) as an amendment (Amendment #2496) to the Small Business Jobs and Tax Relief Act (S. 2237). The next day, however, Senate Majority Leader Harry Reid declined the motion to add the amendment to the bill. Nonetheless, the legislative action was noted in media coverage and has spurred debate about the sales tax fairness issue in the Senate. It also provided the amendment’s sponsors with an opportunity to address sales tax fairness on the floor of the Senate.

“Sales taxes go directly to state and local governments, which brings in needed revenue for maintaining our schools, fixing our roads, and supporting local law enforcement,” said Sen. Enzi, who, along with Senators Alexander, Durbin, and Tim Johnson (D-SD) introduced the bill in November 2011. “If sales over the Internet continue to go untaxed and electronic commerce continue to soar, revenues to state and local governments will plummet. But if Congress fails to authorize states to collect tax on remote sales, and electronic commerce continues to grow, we are implicitly blessing a situation where states will be forced to raise other tax — such as income or property taxes — to offset the growing loss of sales tax revenue.”

The Marketplace Equity Act would give states the authority to require remote online retailers to collect and remit sales tax to the state on in-state purchases. Importantly, the House bill has a small-business exemption of $1 million in remote sales nationwide.

With the House hearing less than two weeks away, booksellers are urged to call their representatives and ask for their support of the Marketplace Equity Act, especially if their elected official is a member of the Judiciary Committee.

To make the outreach easier, ABA has created a template letter [1] that booksellers can adapt and e-mail, or use as a source for talking points in a call to their rep’s office. Booksellers are asked to contact ABA Senior Public Policy Analyst David Grogan [2] if their lawmaker indicates support or opposition to the bill.