Sales Tax Fairness Punted to 2013 Congressional Session

Despite the aggressive efforts of proponents, the 112^th session of Congress closed without a vote on sales tax fairness legislation. Sponsors of the Marketplace Fairness Act (S. 1832) tried unsuccessfully to attach the bill, which would authorize states to require remote retailers to collect and remit sales tax to the state, as an amendment to other legislation in the 112^th session of Congress. The bill’s sponsors now look to pass S. 1832 in the new session of Congress.

“While it is a disappointing that the Marketplace Fairness Act was not put to a vote before the 112th Congress rushed to adjourn following the adoption of fiscal cliff legislation over the New Year’s weekend, it is not entirely surprising,” said ABA CEO Oren Teicher. “But a growing, bipartisan consensus is finally emerging in Washington that sales tax fairness legislation must be passed soon, and, heading in 2013, momentum is on our side.” Teicher noted that “there is no question that, while the campaign for federal sales tax fairness has been a long one, 2012 saw a number of very significant victories on the state level. The upcoming session of Congress presents a significant opportunity to pass federal sales tax fairness legislation. None of our sales tax victories would have been won without the energetic and persistent advocacy efforts of booksellers, and we are extremely grateful for your efforts. Your voice will continue to positively impact the fight for sales tax fairness.” 

Sen. Max Baucus (D-Mont.), who chairs the Senate Committee on Finance, believes sales tax fairness should be part of a more comprehensive tax reform bill to be taken up in 2013, as reported by The Hill [1]. And Sen. Richard Durbin (D-IL), one of the sponsors of S.1832, told The Hill that he would look to reintroduce the Marketplace Fairness Act next year, as well.

The Marketplace Fairness Act would give states the right to require remote, online retailers to collect and remit sales tax in a state, so long as the remote retailer does $500,000 or more per year in out-of-state sales. 

Through December, there was a bipartisan push to get the bill voted on before the Congressional session ended this week. In mid-December, the National Governors Association wrote to the Senate Committee on Finance [2]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.