NRF welcomes U.S. Congress' introduction of Marketplace Fairness Act, requiring Internet merchants to collect sales tax the same way as local businesses do
November 10, 2011
(National Retail Federation)
– The National Retail Federation welcomed today’s introduction of the Marketplace Fairness Act, saying the measure shows momentum is quickly building for Congress to pass legislation requiring Internet merchants to collect sales tax the same as local businesses. NRF is also intensifying its lobbying, grassroots, advertising and earned media outreach to push for passage of sales tax fairness legislation.
“Over the last 20 years the retail industry has changed dramatically, but unfortunately our antiquated regime for sales tax collection has not kept up,” NRF President and CEO Matthew Shay said. “In a 21st Century retail industry, we ought to have a 21st Century system to ensure uniform collection of sales tax. A modern approach to this issue would provide states with additional revenue in order to protect jobs that are badly needed to support American families and keep our communities economically healthy. And it’s not just about retail – fair sales tax laws are needed so budget cuts don’t force layoffs for essential workers like police, firefighters and schoolteachers.”
“With three bills offered in just over three months, Congress has gotten the message and is ready to act,” Shay said. “As the industry that employs one out of every four Americans, we are determined to help make this goal become reality.”
NRF had led the retail industry’s efforts calling for federal legislation that provides sales tax fairness for more than a decade, and this week is launching a concerted push, involving lobbying, grassroots and communications, intended to convince Congress to pass sales tax legislation as soon as possible. The ads, media hits, www.RetailMeansJobs.com/SalesTaxFairness web site and an op-ed calling sales tax legislation “a down payment on fundamental tax reform” are aimed at getting the congressional Joint Select Committee on Deficit Reduction to act on the issue in the two weeks before it releases its report.
The Marketplace Fairness Act was introduced today by Senator Michael Enzi, R-Wyo., and becomes the third major sales tax measure introduced or reintroduced this year. All would make it easier for states to require out-of-state sellers to collect sales tax from their residents, but vary in their approach. Both the Marketplace Equity Act unveiled last month and today’s bill would require states to adopt a series of simplification steps, but the list of steps required by the Enzi bill is longer. Enzi’s bill has nine bipartisan cosponsors including Senate Majority Whip Richard Durbin, D-Ill., lead co-sponsor of the Main Street Fairness Act, along with Senators Lamar Alexander, R-Tenn.; John Boozman, R-Ariz.; Mark Pryor, D-Ariz.; Roy Blunt, R-Mo.; Tim Johnson, D-S.D.; Sheldon Whitehouse and Jack Reed, both D-R.I.; and Bob Corker, R-Tenn.
Online sellers are already required to collect sales tax from customers in their own states, but congressional action is needed because of a 1992 U.S. Supreme Court ruling. The court ruled in Quill v. North Dakota that retailers are required to collect sales tax from out-of-state customers only if they have a physical presence such as a store, warehouse or office in the customer’s state. The court held that the 45 state and 7,600 local sales tax systems across the nation were too complicated for a retailer to otherwise know how much tax to collect.
As the world’s largest retail trade association and the voice of retail worldwide, NRF represents retailers of all types and sizes, including chain restaurants and industry partners, from the United States and more than 45 countries abroad. Retailers operate more than 3.6 million U.S. establishments that support one in four U.S. jobs – 42 million working Americans. Contributing $2.5 trillion to annual GDP, retail is a daily barometer for the nation’s economy. NRF’s Retail Means Jobs campaign emphasizes the economic importance of retail and encourages policymakers to support a Jobs, Innovation and Consumer Value Agenda aimed at boosting economic growth and job creation. www.nrf.com