Governors Urge Congress to Pass Sales Tax Fairness

Last week, the National Governors Association (NGA) wrote to the Senate Committee on Finance [1] to urge passage of the Marketplace Fairness Act (S. 1832) this year. The Marketplace Fairness Act would give states the right to require remote, online retailers to collect and remit sales tax in a state. The letter was sent to Senators Max Baucus (D-MT) and Orrin Hatch (R-UT). Baucus is the chairman of the Senate Committee on Finance and Hatch its ranking member.

Writing on behalf of NGA members, Washington Gov. Christine Gregoire (D) and Tennessee Gov. Bill Haslam (R) said that the time to pass federal sales tax fairness legislation is now. “We understand that you would prefer to take up the Marketplace Fairness Act next year in the context of wide-ranging, comprehensive tax reform,” they wrote.  “Frankly, our Main Street businesses and states cannot afford to wait.  This is our best chance to pass this important legislation and we urge your support for enacting S. 1832 this year.”

Stating that the need for sales tax fairness has never been greater, Gregoire and Haslam stressed: “Failure to act now will only exacerbate state losses and harm local businesses that are losing sales to online sellers. According to a leading Internet analytics firm, 2012 holiday online sales are up 14 percent from last year. (Wall Street Journal, Real-Time Economics, Dec. 5, 2012.) Cyber Monday was the heaviest online spending day on record at $1.47 billion….

“The Marketplace Fairness Act restores fairness by providing states the authority to collect if they are willing to simplify their tax systems to make it easier to do business. It also provides protection to truly small businesses in your state through a small business exception.  This common sense approach will allow states to collect taxes they are owed, help businesses comply with different state laws, and provide fair competition between retailers that will benefit consumers and protect jobs.  Furthermore, passage of the bill will serve as the equivalent of a $23 billion stimulus to state and local governments helping to speed recovery and grow the economy.”