[Congressional Record Volume 159, Number 57 (Wednesday, April 24, 2013)]
[Senate]
[Pages S2918-S2919]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                        Marketplace Fairness Act

  After we have finished the vote on the judge, I am hoping this 
important issue will leave us in a position to move to proceed to the 
underlying bill, the Marketplace Fairness Act. This is a bill that 
Senator Enzi of Wyoming and I have introduced in an effort to bring 
some equity and fairness when it comes to the collection of sales tax.
  Currently, in the United States, Internet retailers are not required 
by law to collect sales tax from sales in States that have a sales tax, 
and that is about 45 or 46 States. The Supreme Court told us 20 years 
ago if remote sales--catalog sales and Internet sales--are to collect 
sales tax, Congress has to pass the law to do it. That is what this is. 
We have been waiting 20 years. In the meantime, it has created some 
serious problems.
  First, Internet retailers have an advantage over the brick-and-mortar 
businesses in communities. They have an advantage because the Internet 
retailers don't collect sales tax, so there is an automatic discount on 
whatever the State sales tax might be--6, 8, 9, or 10 percent. This has 
caused many of the stores on Main Street and in shopping malls to face 
competition that is unfair and sometimes forces them into closing their 
businesses.
  We are trying to level the playing field and say: If you sell into a 
State such as Illinois, you will collect our sales tax on the sales to 
Illinoisans buying your products, period.
  The debate has come up over the States which have no sales tax. Let 
me make it clear: There is nothing in the Marketplace Fairness bill 
which will impose any new Federal tax or any sales tax beyond what is 
currently in the law in every State in the union.
  If a State, such as Oregon, Montana, New Hampshire, Delaware, even 
Alaska, has no State sales tax, this bill will not change it. 
The residents of those States will not be compelled to pay a sales tax 
either over the counter or over the Internet. If a retailer that 
happens to be located in one of those States sells into a State with a 
sales tax, we will provide, free of charge, the software for them to 
collect the sales tax and remit it to the State where the purchase was 
made.

  There have been arguments that this is too complicated; that there 
are 9,000 different taxing districts. I just have to say that with 
software available today, what we are suggesting is something that is 
easily done without great cost. In fact, in this bill we are requiring 
the States to provide software to the Internet retailers free of charge 
so they can collect the sales tax as it is charged on each Internet 
purchase.
  There have been suggestions by some that we ought to carve out some 
States; that we ought to say this new law will apply to some States but 
not to other States. The States and their businesses have to volunteer 
to collect a sales tax for another State.
  I cannot accept that. It is worse than the current situation.
  In the current situation, the store on Main Street is competing with 
an Internet retailer that doesn't collect a sales tax. This carve-out 
approach would say not only will we discriminate against those shops on 
Main Street, other Internet retailers which are not in the State that 
is carved out have to collect sales tax, but those in the carve-out 
State don't. So it makes for an even more inequitable situation. I 
could not accept it.
  I might say the Presiding Officer, who has quite a history on this 
issue, having been one of the parties to the Quill Supreme Court 
decision, also made the point that we ought to take care; the standard 
we set for the collection of sales tax is likely to be used in the next 
trade negotiation with a country that is trying to establish their 
rules when it comes to competition on Internet commerce.
  So if the collection of sales tax is required across the board in 
America, the same can be asked in our trade agreements with other 
countries. If we don't do that, we run the risk that the carve-out 
becomes the exception that makes the rule in the next trade agreement, 
which is something that would be totally unfair to American companies.
  So that is where we stand. What I said yesterday, I will repeat now. 
At noon today we will move to proceed to this bill. I have urged my 
colleagues to come forward with amendments if they have them. If they 
don't, that is fine. But if they do, bring them forward. Let's not 
delay this issue.
  We are in the last week before a recess. Members have plans back in 
their States for the weekend, and we want to make sure they can keep 
those plans. Those Members who have an amendment to this bill should 
step forward with their suggestions immediately after the vote on the 
motion to proceed.
  Members should bring their amendments to the Senate floor. Don't 
wait. It is important that we do this on a regular basis so we can 
debate those amendments which need to be debated and vote on them, 
which is almost how a Senate is supposed to do it. That is what we 
face.
  I urge those who are holding back their amendments and want to wait 
until Thursday or Friday--if anybody does that, we are likely to be 
here beyond Thursday and Friday, and that is not fair to our 
colleagues. If anybody has a good amendment--or any amendment for that 
matter--bring it to the floor.
  Senator Enzi, Senator Alexander, Senator Heitkamp, and I will work to 
try to find a way to accommodate amendments that are consistent with 
the bill--or at least debate them and have a vote on them if they are 
not. I think that is the best thing we can do. As I said, I think that 
is why we were elected--to debate these issues, resolve them, and vote.
  So this is a fair warning to everyone. There are no excuses left. 
This bill has been on the calendar and available for amendment since 
last week, which gave everyone plenty of time to craft their amendment. 
Bring it to the floor immediately after the vote on the motion to 
proceed, and let's get down to business. Let's do what we were elected 
to do and pass this bill--or at least vote on this bill, and I hope 
pass it--before we break for this recess.
  The PRESIDING OFFICER. The Senator from Georgia.
  Mr. ISAKSON. Madam President, I ask unanimous consent to address the 
Senate for up to 5 minutes on the marketplace fairness legislation.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. ISAKSON. Madam President, before he leaves the floor, I would 
like to thank the distinguished majority whip for his leadership. I 
also want to thank Senator Enzi, Senator Alexander, and

[[Page S2919]]

the Presiding Officer for their leadership on what is an important 
issue to my State, and really to every State.
  The marketplace fairness bill is a good idea whose time has finally 
come. We have been waiting 20 years since the court decision to give 
direction to our States so they can collect the retail sales tax upon 
which many of them finance most--if not all in some cases--of their 
governmental operations. This is not a new tax. It is not a different 
tax. It is not a tax we are applying to anybody. It is a mechanism for 
the collection of a tax that has been owed for over 20 years by people 
making retail purchases in our States from people who sell out of 
State.

  I commend the leadership on the legislation, the way it is drawn. I 
hope everybody will bring their amendments to the floor, if they have 
any. I don't know that there is any need for them. I hope we can send a 
clear message to the House and to our States that we are prepared to 
let our local governments and our State governments collect the tax 
that is owed to them and has been owed to them.
  The Governor of my State, Nathan Deal, last year led a major tax 
reform package that passed with only one dissenting vote in our 
legislature. It reformed taxes on utilities for manufacturing to 
attract businesses to our State. It reformed our income tax code and it 
reformed a lot of our taxes, but it also passed legislation consistent 
with the Marketplace Fairness Act so we can finally collect a tax that 
has been owed for a long time in our State.
  As a real estate guy, as someone who used to lease retail space in 
shopping centers and on corners in the cities and counties in our 
State, I know what it has meant to retailers. What has happened is, in 
many cases, they become showrooms and servicing agents for an offsite 
seller. Customers in our community will go to the retail store, look at 
the products, go home and go on the Internet, buy the product on the 
Internet, and if something goes wrong with it, they will go back to the 
store and try to get it fixed. But the State never gets the sales tax 
on that sale because it was an Internet sale made by someone offsite.
  Secondly, it has put pressure on the rest of the tax system. Think 
about this. If a local community gets most of its revenue from a local 
special purpose sales tax and all of a sudden that tax goes down, not 
because people aren't paying it but because it is not being collected, 
what happens? The pressure on the ad valorem tax goes up. So the 
retailer, who is already burdened with losing business because of 
Internet sales, becomes further burdened because they have more 
pressure from the ad valorem tax they pay for the space they lease and 
occupy. So it has had a compounding effect.
  Also, we are famous in Washington for what is known as unfunded 
mandates to local government, whether it is IDEA in education or 
whatever it might be. It is time we gave our local governments the 
chance for a mandate to collect a tax that is owed to them.
  Lastly, for my State of Georgia, we have a 4-percent sales and use 
tax that goes to our State. We have special purpose local option sales 
taxes that are referendum taxes levied by local communities to finance 
school construction and other opportunities. We have a Metropolitan 
Rapid Transit Authority in Atlanta which in 1974 was seeded with a 
referendum that passed a 1-cent tax in Fulton and Dekalb Counties for 
the financing of the beginning of that subway system. It is not fair to 
deny those States and those entities the ability to collect a tax that 
is owed. It is only right, after 20 years of getting direction from the 
appellate courts as to what to do, that this Senate and this Congress 
and our country say to our States we are going to give a mandate for 
States to collect the taxes owed to them. We are going to take the 
pressure off the local retailers. We are going to level the playing 
field. We are not adding a tax to anyone; we are adding opportunity to 
everyone.
  I commend Senator Durbin, the Presiding Officer, Senator Alexander, 
and Senator Enzi for their tireless leadership. I urge all Members of 
the Senate to do what we did on the motion to proceed and what we did 
on the amendment on the budget. Let's give an overwhelming ratification 
of the Marketplace Fairness Act.
  Mr. CARPER. Madam President, would the Senator yield for a moment?
  Mr. ISAKSON. Absolutely.
  Mr. CARPER. Madam President, I wish to join with the Senator from 
Georgia. There are issues we disagree on, but this is a subject we 
agree on--another one we agree on.
  I was privileged to be the Governor of Delaware for 8 years, and now 
I have served with the Senator from Georgia and other colleagues for 
the last 12 years. Delaware is one of those States that doesn't have a 
sales tax. I think most of these States that don't have a sales tax are 
not supportive of this bill. I am. Either I am out of step or maybe 
not.
  We have all these signs when people come into a State that say 
``Welcome to,'' whether it is Georgia or Delaware or North Dakota. We 
had a sign that said, ``Welcome to Delaware, the Small Wonder, the 
First State'' and they all had the name of the Governor. When I became 
Governor, I said why don't we take down the name of the Governor and 
put something else up, and what we put up is ``Home of Tax-Free 
Shopping.'' That is what we put up: ``Home of Tax-Free Shopping.''
  In our little State, we have borders with New Jersey to the east and 
Pennsylvania to the north and Maryland to the west. They have sales 
tax. A lot of people in those States come to Delaware to shop, to buy 
things, and help to fuel our economy, our retail economy, and to help 
fuel our tourism economy as well. When people say to me: As a former 
Governor and a Senator from a State that doesn't have a sales tax, why 
do you support this bill, one, I think it is an equity issue. The 
brick-and-mortar merchants are there collecting the sales tax in those 
45 or so States that have a sales tax to help support the community, 
help to support the government and the services that are provided 
locally in States across America. Then we have folks who are selling 
things over the Internet to people who live in those States without 
collecting the sales tax, without being part of the solution.
  The other thing--and the Senator from Georgia knows as well as I do--
the brick-and-mortar merchants have people come into their stores 
pretty regularly, and they ask the merchants: How would you like to 
help support the Little League? How would you like to help support the 
Boy Scouts and Girl Scouts? How would you like to support this festival 
or this function? They get asked about those things all the time--and 
they do. Meanwhile, the folks they are competing with--the Internet 
sales--they are not supporting those kinds of activities. So there is 
an equity question here.
  For me, why I see value in this--a guy who comes from a State who 
doesn't have a sales tax--is this: I want more people from other 
States, including the three around us, to come and buy things in my 
State. If they can buy things over the Internet and not pay a sales 
tax, then why would they come to Delaware? But if they have to pay a 
sales tax that is going to be collected by the Internet provider 
selling to people in those States with sales taxes, they might come to 
Delaware and shop.
  Mr. ISAKSON. Madam President, I appreciate the leadership of the 
distinguished former Governor. Knowing him as well as I do, he is a 
States rights advocate and this is a States rights issue and we are 
here to protect the rights of our States.
  Mr. CARPER. It sure is a States rights issue. I would be remiss if I 
didn't say this. I know my colleague has to leave. But in my first term 
as Governor, I had never heard of Mike Enzi. Who is this Mike Enzi guy? 
It turns out he is a great guy. He is one of our colleagues and a 
former mayor of Gillette, WY, and he has been pushing this as a Senator 
forever. Mike Leavitt, who succeeded me as chairman of the NGA, has 
been pushing this forever, a former Governor of Utah. So I give a shout 
out to both of them for their leadership. If we don't give up, 
sometimes we can get stuff done, and Mike Enzi doesn't give up and I 
know the Senator from Georgia doesn't. So I thank my friend.