[Congressional Record Volume 160, Number 67 (Tuesday, May 6, 2014)]
[Senate]
[Pages S2707-S2712]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


 ENERGY SAVINGS AND INDUSTRIAL COMPETITIVENESS ACT OF 2014--MOTION TO 
                           PROCEED--Continued

  The PRESIDING OFFICER. The Senator from Tennessee.
  Mr. ALEXANDER. Mr. President, on behalf of the distinguished Senator 
from Illinois, Mr. Durbin, I ask unanimous consent that he and I and 
the Senator from Wyoming, Mr. Enzi, and the Senator from North Dakota, 
Ms. Heitkamp, be permitted to engage in a colloquy.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                        Marketplace Fairness Act

  Mr. ALEXANDER. Mr. President, this colloquy is for the purpose of 
marking an important day in the Senate because it was on this day 1 
year ago that the Senate overwhelmingly passed the Marketplace Fairness 
Act. We did this by an overwhelmingly bipartisan vote. Sixty-nine 
Senators, including about half of our Republican caucus, 21 
Republicans, supported an 11-page bill--a rarity in this body--that is 
about just two words, and the words are ``States rights.''
  The Marketplace Fairness Act, simply described, gives States the 
right to decide for themselves whether to collect or not collect State 
sales taxes that are already owed. This ability to collect taxes that 
are already owed would give States the option to reduce existing taxes 
or to avoid a new tax or to pay for services without raising taxes.
  The Marketplace Fairness Act closes a tax loophole that prefers some 
businesses over other businesses and some taxpayers over other 
taxpayers. Out-of-State businesses are being subsidized because they 
don't have to collect sales taxes--taxes that are owed--and local 
businesses do. As a result, some taxpayers are being subsidized because 
some pay sales taxes and others do not even though they may owe the 
taxes. That is not right, and it is not fair. This legislation, which 
passed the Senate 1 year ago, gives States the option to decide whether 
to change that.
  One of the best ways to lower State taxes is for the Federal 
Government to allow States to collect State sales taxes from everyone 
who owes the tax and not just from some of the people who owe the tax.
  We have an honor roll of conservatives who do not think States ought 
to have to play ``Mother May I?'' with the Federal Government on this 
question. For example, Al Cardenas, chairman of the American 
Conservative Union; Art Laffer, President Reagan's favorite economist; 
Charles Krauthammer; Representative Paul Ryan; Governor Mike Pence, a 
former Member of the House of Representatives; Governor Chris Christie; 
former Governor Jeb Bush; former Governor Mitch Daniels; and the late 
William F. Buckley, not to mention Governor Bill Haslam of the State of 
Tennessee, agree that recognizing the power of State legislators to 
make these decisions for themselves is consistent with the 10th 
amendment and our constitutional framework.
  In our State of Tennessee, the Marketplace Fairness Act is an 
insurance policy against a State income tax. We don't have a State 
income tax and we don't want a State income tax.
  The House of Representatives has not yet acted on this bill. The bill 
that was passed a year ago today by the Senate was an overwhelming 
bipartisan vote. We are hopeful that the House will soon either enact 
our bill, which we have sent to them, or send us their version of the 
bill so we can confer and send a result to the President of the United 
States.
  State and local governments have been waiting on Congress to solve 
this problem for more than 20 years--since 1992 when the Supreme Court 
said Congress has the ultimate power to resolve the issue. Now is the 
time to act on this legislation. We are ready to work with the House to 
enact that legislation this year.
  In conclusion, I will read the comments of Al Cardenas, chairman of 
the American Conservative Union and former chairman of the Florida 
Republican Party. When talking about the Marketplace Fairness Act, Mr. 
Cardenas said,

       When it comes to state sales tax, it is time to address the 
     area where federally mandated prejudice is most egregious--
     the policy towards Internet sales, the decades-old inequity 
     between online and in-person sales as outdated and unfair.

  Again, that was Al Cardenas, chairman of the American Conservative 
Union, speaking in support of the Marketplace Fairness Act.
  I am pleased that of the four Senators who will be on the floor 
during this colloquy, two are already here. I see the Senator from 
North Dakota, and I see the Senator from Wyoming. If it is all right 
with the Senator from Wyoming, I will defer to the Senator from North 
Dakota. While the Senator may be a little modest about this--I hope she 
is not--she actually started it all. She has a better view of the 
Marketplace Fairness Act than just about anyone because of her service 
in the State government of North Dakota. She has an ability to explain 
in plain and simple language why the fair and right thing to do is to 
recognize the rights of States to make these decisions for themselves. 
Her ability to do that has been a crucial part of our debate and is one 
of the reasons why we had such overwhelming bipartisan support in the 
Senate.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Ms. HEITKAMP. Mr. President, first I want to say what an honor it has 
been for me to participate in any amount of leadership on this issue 
here on the floor of the Senate with such incredible leaders as Senator 
Alexander, Senator Enzi, and Senator Durbin, who have long recognized 
the injustice that is being done to Main Street businesses and the 
problems we have in terms of States rights and making sure we maintain 
a system that recognizes the value of States rights and the value of a 
State prerogative so they can make their own taxing decisions without 
interference from the U.S. Senate or anyone in the Federal Government.
  As Senator Alexander has explained, when I first came to this body, 
Senator Durbin suggested to his staff that they try to find out where I 
would be on this issue because my predecessor, Senator Dorgan, had been 
very active with this coalition of leaders on addressing this problem, 
and his staff suggested that he might want to read the caption on the 
Quill case since there was the name ``Heidi Heitkamp'' in that caption.
  The reality is that back in the late 1980s and early 1990s, we saw 
this phenomenon of increased catalog sales. I am not talking about 
companies such as Sears that had a physical presence in the community 
and could thereby collect sales taxes but more and more boutique types 
of catalogs. There was more and more competition coming from catalogs.
  I had more and more Main Street businesses coming to me as the tax 
commissioner asking: How is this fair? How is it fair that I started my 
little business--whether it was a wallpaper business or a fabric 
business, whatever it was--and people come to my store and look at my 
sample books that I actually have to pay for, test out the quality of 
the fabric, take a lot number, and leave and order it from the catalog?
  That was a pretty horrible thing to happen to Main Street businesses 
back in the late 1980s.
  Can you imagine walking into a Main Street business now and not only 
getting advice and information on how the product operates and what the 
warrantees are--not to mention all the training these Main Street 
businesses have given their employees--but then taking a snapshot of a 
barcode so you can order it on the Internet right there in the store? I 
can only imagine how discouraging this is for Main Street businesses. 
It is unfair to Main Street businesses when they are asked to support 
their communities, such as putting the ad in the little high school 
newspaper or contributing to a football billboard or the local fire 
department so they can serve their communities.
  If you think of all the things Main Street businesses do, they are 
not just involved in retail, they are involved in communities. Yet 
those Main Street businesses are not asking for an unfair advantage; 
they are asking for fairness and equity. They are asking that when 
sales tax rates have gone up from 8 percent to 9 percent because the 
base dwindles--you have to raise the rate in order to collect the same 
amount of money--they are being basically taxed out of the marketplace 
through this

[[Page S2708]]

unfair advantage that remote sellers have against them by not having 
the obligation to collect a tax that is honestly already owed.
  I want to reiterate a couple of points Senator Alexander was making 
because I think it is so important. One of the arguments we hear 
consistently about marketplace fairness is that it is a Federal 
imposition of a tax. Nothing could be further from the truth. This is a 
tax that is already owed. This is a tax that is owed to the States. It 
is owed by the people who make these purchases--a sales and use tax. We 
are doing nothing more than telling every State: If you want to pursue 
Main Street fairness, you have a path forward.
  If a State doesn't want to tax or put a collection responsibility on 
remote sellers, there is nothing in this bill that requires them to do 
that.
  This is a States rights bill, but it is also a fairness to Main 
Street businesses bill. It is a bill that would make sure that the 
promise of an equitable tax system in this country is fulfilled. This 
bill is a promise that if you play by the rules and do everything the 
way you should as a business, no one is going to get an advantage over 
you, and we are going to level the playing field. There is no level 
playing field when somebody has a 10-percent advantage over you simply 
because you actually invested in a community, put up bricks and mortar, 
trained a sales force, and yet you are going to be the disadvantaged 
one.
  When we started this a year ago, we were joined by all manner of 
retailers, but I will never forget the story of a young woman who had a 
dream. She loves animals and pets. She trained herself in pet nutrition 
and opened a pet nutrition store in Missouri--it might have been Kansas 
or Missouri because it was in the Kansas City area. When you combine 
State and local taxes where her business is located, the tax rate was 9 
percent. People would come to her store and explain the ailment or 
condition of their pets, and her very excellent sales staff would tell 
them what product was best for their cat or dog. She knew when they 
walked out, they simply ordered it on the Internet because she could 
not give them a 10-percent discount. That is what happened in her 
business.
  We told her that if she had a small Internet business with $1 million 
in sales, she would have to collect taxes too. She said: I would be so 
happy to collect a sales tax if I had $1 million in Internet sales; 
that would mean I was winning.
  If you think about that and the mom-and-pop businesses--just a couple 
of kind of myth-breaking things about how this is truly going to affect 
small business. This is not going to have any effect at all on any 
business if we pass the bill we passed that has gross sales below $1 
million. We have a threshold.
  The other myth is that they are going to be subjected to millions of 
audits and millions of tax rates. The streamlined process has proven 
over and over that this is not higher math. We can get this done.
  I have a story from the time we did the original Quill case. It got a 
lot of national attention, and there was a lot of discussion about 
this. I had a reporter from the Omaha World Herald call me. He said he 
had just called a major retailer to order some new shirts, and the 
retailer he was talking to had been very active in opposing the Quill 
case and very active in opposing what we were trying to do. One of 
their arguments was that they could not possibly know the tax rate on 
that shirt in his jurisdiction. When he ordered his shirt, he told the 
person on the other end of the phone his size, and that person said: 
You know, maybe you want to check because last time you ordered, it was 
a size 15.
  This reporter said to me: If they can know my shirt size, they could 
probably figure out the tax rate of the jurisdiction I live in.
  Think about it. It has only gotten easier.
  One of our major retailers, which is adamant about how this would be 
the most horrible and onerous thing, offers a package for $15 if anyone 
wants to collect the tax.
  The other fallacy here and one of the myths I want to break is that 
if I went to sell my old used lawnmower on the Internet, I would be 
subjected to sales tax. I think it is only natural that this body 
doesn't have a lot of experience in sales taxation. It is not what we 
do. It is what State and local governments do. It is what people who 
had my former job do. However, there is such a thing as casual sales. 
If are you not in the business of being a retailer in every State, you 
have no collection responsibility. It is only retailers, only people 
who are in the business of retailing and only people who have retail 
sales over $1 million who would be affected. And we have streamlined 
the process. We have made this possible. It is a small thing to ask for 
us to take an action in this body and in the House of Representatives 
to tell Main Street businesses that they still matter in the 
marketplace and that we are going to listen to them and we are going to 
do everything we can to get them fairness and justice in our tax 
system.

  So, again, I congratulate the excellent leadership that has come 
before me on this floor on this issue. I pledge once again to do 
everything we can to get this marketplace fairness done in this 
Congress so that our Main Street businesses don't have to wait a day 
longer for tax justice in this country.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Tennessee.
  Mr. ALEXANDER. I thank the Senator from North Dakota for her eloquent 
statement and for her leadership. I am delighted that she has gone from 
being a caption on a lawsuit to a Senator who can help us pass this 
bill. In just a moment I will yield the leadership of this colloquy to 
the assistant Democratic leader, but I wish to say a word about the 
next Senator speaking and about Senator Durbin as well.
  Senator Mike Enzi is the real pioneer on the Marketplace Fairness 
Act. He knows what he is talking about. He is a shoestore owner from 
Wyoming. He knows what it is like for someone to come in and try on a 
pair of shoes and then go home and order them on the Internet and 
disadvantage a smalltown owner of a shoestore as compared with an out-
of-State business. He has diligently and systematically lead this fight 
the whole time, and it was due to that diligence that the Senate had 
this overwhelming bipartisan achievement one year ago today. I thank 
him for his leadership.
  Now I recognize the assistant Democratic leader. The truth of the 
matter is, the way the Senate works, we would never have been able to 
pass this in the Senate with such fine fashion if it hadn't been for 
the leadership of the assistant Democratic leader, Senator Durbin of 
Illinois. I thank him very much for his leadership and congratulate him 
for it, and I am glad to turn the leadership of the colloquy over to 
him.
  The PRESIDING OFFICER. The Senator from Wyoming.
  Mr. ENZI. Mr. President, I thank Senator Alexander for the leadership 
he has shown on this bill. We had a much more extensive bill designed, 
and I worked on it for all of the years he mentioned, which is all the 
years I have been here, 17 years. We made some progress every single 
time it came up, but there were misconceptions with it. Senator 
Alexander suggested the solution that is the true solution for this 
bill. He changed it to a very brief States rights bill, not a Federal 
bill. This doesn't have any requirements for any State, but it has an 
ability for States to make up their own mind.
  So I rise today with my colleagues from Illinois, Tennessee, and 
North Dakota to recognize the anniversary of this significant event. 
One year ago today, with a show of strong bipartisan support, the 
Senate took an important step forward to level the playing field for 
all retailers that collect sales taxes. But it is not really about the 
retailers; it is about the people who work in those stores. We are 
talking about middle America. They can't afford to have the employees 
unless they make the sales, and if they just do the sales pitch and 
then it is ordered online, there is no revenue the employee brought in, 
and if there is a prolonged period when there is no revenue, the 
business doesn't need the employee. This bill is about supporting the 
jobs we have in our towns. It is about the people who are our neighbors 
who work in the stores and the people who have the stores that 
participate in all of the community events.
  As the Senator from North Dakota said--and she is probably the only 
one

[[Page S2709]]

who has worked on this bill longer than I have because she was involved 
in it in State government when she was in North Dakota. I appreciate 
her expertise on this bill. Without some of the explanations she was 
able to give on the history of this bill, we wouldn't have been able to 
get it done.
  Of course, Senator Durbin and I have been speaking for what seems 
like years now trying to explain how this bill works, taking into 
consideration any concerns people had and trying to overcome those 
concerns. I couldn't guess how many hundreds of meetings there have 
been over trying to get this bill right and to get it fair, all so the 
States still have the revenue they need to operate without imposing 
perhaps a personal income tax. In the case of Virginia, I think they 
are not going to raise the gas tax if this bill passes. So this is a 
States rights bill. It takes money to the States, and it is money that 
is really owed right now.
  I did a little checking. Wyoming started collecting their sales tax 
in 1935, and it has been virtually unchanged since that time. There is 
a provision in the sales tax law that requires a form, so that if 
someone buys something from out of State and didn't pay sales and use 
tax on it, they are supposed to fill out this form before the end of 
the month and send the sales and use tax with the form to the State 
government to pay it.
  One of the surprises I discovered is there is about $1\1/2\ million a 
year collected in Wyoming that way--people obeying the law. But that is 
pretty tough to keep track of and especially if one doesn't make out-
of-State purchases every day. So the State, of course, imposed on local 
retailers the requirement that they collect sales tax, and then people 
don't have to fill out that form. They don't have to send it in before 
the end of the month.
  So they made it a lot easier by making the retailers collect the 
money. Unfortunately, they weren't able to make all of the retailers 
collect the money. Because of a court case, they aren't able to do it 
out of State, and that is very important because it is a huge loss of 
revenue. I think Wyoming actually loses about $23 million a year 
because of purchases over the Internet where no sales tax is paid.
  On May 6, 2013, this Chamber passed the Marketplace Fairness Act, and 
we passed it with 69 votes. Some of the votes we had were as high as 76 
votes. That is very significant around here. Sixty-nine is an 
incredible number for the Senate to produce on any bill. It came from a 
majority of both sides of the aisle, which is important. I wish to 
remind my colleagues that this bill is about fairness. It is about 
leveling the playing field between brick-and-mortar and online 
companies, and it is about collecting that tax that is already due. It 
is not about raising taxes. It isn't about taxing the Internet, and it 
isn't about taxing Internet access. I think we are all opposed to that. 
But we are in favor of the States, if they wish, to be able to collect 
the taxes they have imposed on the people who live in their State. So 
it is a States rights bill.
  In a nutshell, the Marketplace Fairness Act is a straightforward, 11-
page bill that brings clarity to a vexing area of sales tax collection 
inequity. Online sales often go without collection of the sales tax 
from the point of purchase, while the Main Street stores and the other 
brick-and-mortar stores in town typically face established collection 
procedures--no choice, regular reports.
  Wyoming shouldn't subsidize online retailers that operate and sell to 
people in our State. Neither should Illinois or North Dakota or 
Tennessee or any other State that has sales tax laws. But right now, 
online retailers can offer lower prices than the local businesses that 
hire the local people who pay the property taxes and that participate 
in the community events; the most important thing being those local 
jobs, simply because they do not have to charge the same sales tax out 
of State that all our local merchants do.
  Sales taxes are important. They pay for the roads we drive on. They 
pay for the schools our kids go to. In Wyoming, with the particularly 
small towns, they rely on sales tax for the fire protection and the 
police protection. When people ask me about the sales tax bill, I ask 
them what county they are from and, if it is a small town, I say: Check 
with your fire department and see if, without sales tax, they would be 
able to function. When people understand it is part of their fire 
protection and part of their law enforcement protection, they are much 
more interested in it and understand why the sales tax needs to be 
collected. I don't want to see a situation where other taxes will have 
to be raised to cover basic local services because the online retailers 
are not collecting the sales taxes that are owed on the products they 
sell.
  I remember going into a camera store--I try to get into some stores 
on the weekend and find out what kinds of decisions they have to make, 
particularly decisions that have to do with the Federal Government. I 
was in the camera store and the fellow was explaining he had just lost 
a sale. The sales tax rate in that town is 6 percent. A man came in to 
buy a camera, and the camera was $2,000. But this owner of the store--
the only employee of the store--took the time to help him with all of 
the different gadgets and how to operate it, and showed him what he 
needed and how to do it. Then the customer took a picture of the bar 
code and ordered it online because he saved $120. Technically, he still 
owed $120 to his State. Whether he filled out one of those forms and 
got it in by the end of the month, I doubt it, but that is the law. If 
a State meets the simplification requirements outlined in the bill, it 
may choose to require collection of sales taxes that are already due at 
the point of purchase, including sales conducted through e-commerce. 
Congress is not forcing States to do anything because the Federal 
Government should not have the role or authority in telling a State how 
to manage its finances. This bill specifically says that it is up to 
the States to enforce the law, and it is 100 percent optional. If the 
States do act, they are collecting taxes that are already due by the 
consumers.
  I have been working on this sales tax fairness or marketplace 
fairness issue--or any of the number of names we have had on it through 
the years as we gained more and more support and as people came to 
understand more and more of what was involved--since 1997. As a former 
small business owner, it is important to ensure parity for all 
retailers by modernizing rules for sales tax collection in a way that 
respects technology advances and the existing practices of large and 
small and more traditional businesses, and this bill accomplishes that. 
It uniquely balances the interests of all businesses and respects the 
existing laws and rights of states.
  The Senator from North Dakota mentioned there is a $1 million 
exclusion. This is to help out small businesses, new start-up 
businesses. If you have a start-up business or a small business, until 
you have sold $1 million online or through a catalog in a given year, 
you don't have to comply with this. But once you hit that $1 million 
mark, you can consider yourself a success. We know that is a very small 
percentage of the Nation, but an important part of the total sales of 
the Nation. I think that is why one year ago, 68 of our Senators joined 
me in supporting that Marketplace Fairness Act.
  This evening, my lead cosponsors and I are again taking a stand in 
favor of good public policy for our Nation's retailers while 
highlighting the need to fix some long-standing sales tax system 
complexities. By balancing this collection inequity, the Marketplace 
Fairness Act would help States ensure the viability of the sales tax as 
a major revenue source for State budgets. We found in Wyoming that it 
often constitutes 40 percent of a municipality's revenue. It also would 
close opportunities that encourage tax avoidance.
  Beyond the walls of Congress, the Marketplace Fairness Act has 
received broad support. Trade associations, Governors, mayors, 
legislators, and numerous businesses have expressed support for the 
legislation.
  But there is work still to be done. Our colleagues in the House need 
to pass the Marketplace Fairness Act. I know some Members in the other 
Chamber are working on this issue. A companion Marketplace Fairness Act 
has been introduced. A hearing has been held, and new Members are 
engaged in the issue. I appreciate those efforts, and I hope our 
colleagues in the House will pick up the baton and complete the effort 
to guarantee sales tax fairness. This is the year to finish the work. 
Our States and businesses and

[[Page S2710]]

employees in those businesses cannot wait longer. Enacting the 
Marketplace Fairness Act is the right thing to do.
  In conclusion, I wish to thank everyone associated with this bill for 
their hard work and efforts in getting us to this point: our countless 
supporters across the country, the 68 Senators who joined me to vote 
for a bill a year ago, the 29 cosponsors of the bill for their support, 
and especially my colleagues who joined me tonight for their unwavering 
support of this bill. I can't thank Senator Alexander, Senator 
Heitkamp, and Senator Durbin enough for their efforts. I am going to 
yield the floor and turn it over to Senator Durbin who has been a real 
champion and one of the best explainers of the parts of this bill that 
I have ever run into. I really appreciate his efforts and his help. We 
wouldn't be this far were it not for his efforts.
  The PRESIDING OFFICER (Mr. Donnelly). The Senator from Illinois.
  Mr. DURBIN. Mr. President, I wish to thank my colleague from Wyoming. 
The most frequently asked question, no matter where I appear in 
Illinois or at fundraising events, is, Why can't you folks get along in 
Washington. What is it like to be in a place where everybody is at one 
another's throats and you can't accomplish anything? Why can't you do 
things on a bipartisan basis? What is it like today, and how do you 
compare it to what it was like a few years ago?
  I say to them there are times when we do come together and do 
something important. This is one of those times--the Marketplace 
Fairness Act.
  It was 1 year ago that Senator Enzi led the fight on this. I do not 
know exactly when he started it, but I was happy to join in, in his 
effort, when Senator Byron Dorgan retired. I called Senator Enzi and 
said: I would like to step in and help you with this bill. He said: 
Let's do it. We brought in Lamar Alexander, who made some valuable 
contributions to it. Then along comes Heidi Heitkamp, the new Senator 
from North Dakota. Was she ever ready for this fight--a former sales 
tax commissioner in that State and a former attorney general. She knew 
this issue inside and out. She has been a terrific ally.
  So there were the four of us. What an odd grouping: two Republicans, 
two Democrats from literally all over the United States. We worked 
together, and 1 year ago today we passed this basic bill, the 
marketplace fairness bill. The reason for passing it was just look at 
the name of it: fairness.
  I think about two people when I think about this bill. One of them is 
the mayor of Normal, IL. His name is Chris Koos, a great friend of mine 
and a terrific mayor. Chris, in addition to being the mayor, runs a 
shop where he sells running shoes and bicycles and lots of running 
equipment and stuff.
  So I visited his shop, a great little shop. He is a terrific 
businessperson. He told me a story, which I have heard over and over, 
about people coming in, picking out the bicycle, picking out the shoes. 
That is perfect. Let me try them on. Let me get out and ride this. Then 
they say: I will get back to you. And he never sees them again. They 
turn around and buy the product on the Internet. So Chris is running a 
showroom as much as a business. There is no fairness there.
  When those sales are made on the Internet, instead of in Chris Koos's 
shop, there is no revenue coming back to the city of Normal, IL, or 
McLean County. That is Chris's story, but it is the story of thousands, 
maybe millions, of businesses across America that are losing out now to 
Internet competition that is not collecting the sales tax that is 
supposed to be paid.
  Then I met another man. I will not disclose the name of his company, 
but he is a major retailer in the United States. He came to visit me in 
my office in February or March, and he said: I want to tell you, in 
this last Christmas season, which is the biggest time of the year for 
my big-box business, we had a downturn of 8 percent in sales. Based on 
our projections, we thought for sure we would have more sales. We had a 
downturn of 8 percent. He said: I lost them to the Internet. Senator, I 
can't stay in business this way. I can't run a showroom for people who 
want to sell things on the Internet.
  What we are talking about is the basic collection of sales tax for 
purchases on the Internet. In my State--in virtually all the States 
with a sales tax--there is a legal obligation to pay it. I did not 
realize that until a few years ago. My bookkeeper was doing my family 
tax return for my wife and myself. She called and said: Senator, do you 
want to pay the taxes you owe on Internet purchases? I said: Yes, I 
think I want to pay the taxes I owe. She said: Well, how much did you 
buy on the Internet? I said: I will try to put it together. I called 
her back, gave her a number. She said: Here is the calculation. On your 
State income tax return we will declare that you are going to pay X 
dollars that you owe for Illinois sales tax for purchases you made on 
the Internet. When I said: Is that what I am supposed to do? She said: 
Yes. We did it. We have done it every year since.
  It turns out only 5 percent of Illinois taxpayers fill in that line 
on a State income tax return. I am guessing more than 5 percent of 
taxpayers make Internet purchases. But folks do not know their 
obligation, they do not follow through on their obligation, and the 
losers are, of course, our State and local units of government.
  This bill says, if Illinois, if Indiana, if Wyoming wishes, on a 
voluntary basis, they may use this bill to start collecting sales tax 
when it comes to Internet sales into their State. It is voluntary. The 
States have to decide to do it. It is not a new tax. This has been said 
over and over: It is the existing sales tax wherever it may be--in your 
State, county or city--existing sales tax.
  The bill provides if you are an Internet seller and have less than $1 
million worth of sales in a given year--whether it is Grandma 
Donnelly's applesauce or whatever it happens to be--you are not covered 
by this, but if you have more than $1 million, yes, you have to collect 
the sales tax.
  How can you collect it? First, the States have to provide you with 
the software so your business does not run into the expense of how to 
collect it. You say: I bet that is an elaborate undertaking. You can 
buy the basic software to identify the sales tax based on the 
consumer's address for about $15 for the basic package or maybe a 
couple hundred dollars at the most.
  But in this situation the States are going to help the Internet 
retailers in developing the software so that when someone makes a 
purchase from Chicago, IL, or Springfield, IL, whoever is selling to me 
on the Internet will then forward that sales tax to the Illinois 
Department of Revenue. End of story. It is just that simple.
  What it does, of course, is level the playing field for bricks-and-
mortar businesses, providing a new source of revenue that should be 
collected and is owed legally in these States to the local units of 
government.
  We passed this with enormous support from the retail community. It is 
not surprising. And it just was not the shop owners. It is people who 
understand the importance of this. This has been said over and over: 
These bricks-and-mortar shops around America do so much more than just 
sell a product. They are citizens in the community, corporate business 
citizens in the community. They participate. When the local high school 
is having their graduation program and they want somebody to help 
sponsor it, they will go down to the local sporting goods store for a 
helping hand on the program. That happens over and over. Whether it is 
Khoury League or Pop Warner, they are in there helping in the 
communities.
  Isn't it important and fair that they be treated fairly here? Sixty-
nine Members of the Senate thought so. Democrats and Republicans voted 
for it--Senator Enzi and I, Senator Alexander and Senator Heitkamp. We 
had 29 cosponsors of this bill who sat down and said: Let's pass it.
  We passed it. We sent it to the House of Representatives, and nothing 
has happened--nothing. There have been some statements made over there, 
and I hope those statements lead to action, but it is time for them to 
pick up this bill and this responsibility. If they have a better 
approach, let's see it. Let's work on it. Let's do it on a bipartisan 
basis. Let's come up with an approach that works.
  I cannot tell you how many different businesses have come through my 
door--from Sears, Roebuck down to just basic mom-and-pop businesses--

[[Page S2711]]

and said: What are we going to do about the House of Representatives? 
They just will not take up this measure.
  I hope they will. They still have time to do it. We have waited 1 
year. I do not want to wait much longer. In an election year, it will 
be almost impossible to do it.
  So I hope we can get this done. It is going to mean that local 
businesses that are important and the backbone of our community are 
going to have the resources they need because the sales will take place 
that otherwise are not taking place today, and the local units of 
government will receive the proceeds from the sales tax that is 
collected.
  One of the major marketplace retailers on the Internet is Amazon. 
Amazon may be the biggest. They support this bill. If you ask them why, 
they say: We don't want to fight this battle in 50 States and all the 
different cities and counties as to how much sales tax. Let's just make 
it uniform across the country.
  That is what the bill does. So Amazon supports this. They are 
prepared to collect that sales tax and remit it to the States. They do 
not believe it is an onerous burden that they are going to face. I hope 
others will join them.
  As I have said, 1 year ago today Members of the Senate did something 
we don't do enough. We put aside the partisan differences that cause so 
much gridlock around here and came together to pass bipartisan 
legislation--the Marketplace Fairness Act. On this day last year 69 
Members of the Senate agreed that we need to help create jobs, invest 
in our communities, and keep Main Street alive and able to compete.
  The Marketplace Fairness Act levels the playing field for retailers 
by allowing States to treat brick-and-mortar retailers the same as 
remote retailers in the collection of State and local sales and use 
taxes.
  Those that benefit under our current system--retailers that have a 5- 
to 10-percent price advantage over their competitors on Main Street--
want to continue the status quo. But it is not fair to the thousands of 
Main Street businesses that have worked hard to grow their businesses 
only to become showrooms because of this price advantage. People come 
in, look around, even try on merchandise, and then leave and buy the 
product online.
  This happens many times because sales and use taxes are not collected 
when a product is purchased online, so it seems cheaper. But we all 
know the tax is still owed by the customer. In Illinois about 5 percent 
of customers end up paying that tax.
  Abt Electronics, a retailer in Glenview, IL, knows about this 
challenge all too well. It is president, Michael Abt, said that ``often 
times with consumer electronics, the profit margin is 10 percent or 
less . . . when an online competitor doesn't collect taxes and then 
offers free shipping, it's a huge advantage for the competition.''
  Abt is one of the lucky ones--it is a fine example of a successful 
American business that has continued to grow since opening in 1936 and 
supports about 1,100 jobs. It also has an online presence so it can 
reach even more customers.
  But there are others that haven't been so lucky.
  Soccer Plus in Palatine is an example of what happens when it becomes 
too difficult to compete with online retailers that have a 5- to 10-
percent price advantage.
  A year ago when Soccer Plus went out of business we lost good-paying 
jobs. And Palatine lost a business that was a part of our community.
  There is nothing we can do now for Soccer Plus. But we can still help 
thousands of retailers avoid the same fate as Soccer Plus by leveling 
the playing field for Main Street retailers.
  Since the Senate passed the Marketplace Fairness Act 1 year ago, the 
inequity between Main Street retailers and online retailers has only 
increased as e-commerce has grown.
  Online retail spending grew 14 percent last year alone, to $263.3 
billion, and is estimated to reach over $300 billion in 2014.
  Unlike 20 years ago, or even 10 years ago, we are no longer talking 
about a few online retailers without access to the technology necessary 
to collect sales and use taxes. We are talking about hundreds of 
retailers, many of which are large billion-dollar businesses that have 
a price advantage over small Main Street businesses because they don't 
collect sales and use taxes.
  It is time we update our laws so they match our 21st century 
marketplace.
  Retailers in Illinois can now reach customers all over the country 
through this new marketplace and software has been developed to 
calculate sales and use tax for every jurisdiction in the country--yes, 
all 6,000 of them.
  It is time to end this idea that technology can't handle calculating 
sales and use taxes. Many retailers are already using this technology 
to collect and remit these taxes and similar technology to calculate 
shipping costs. This is especially true when talking about online 
retailers who by their very definition use technology to sell their 
products.

  The internet and e-commerce is no longer a baby in its crib. The baby 
is all grown up, running at full speed, and using outdated laws to 
threaten Main Street businesses.
  The Senate passed a bill to update our laws and correct this inequity 
1 year ago. The bill was supported by over 280 business, State, local, 
and labor organizations, both progressives and conservatives alike.
  Yet the House has done little more than hold a hearing which was 
added to the long list of hearings already held on this issue over the 
last 20 years.
  Each week that the House doesn't act is another week that Congress is 
picking winners and losers--the losers being Main Street retailers, the 
jobs these retailers provide, and the communities these businesses 
support.
  Recently, 1,064 of these businesses sent a letter urging Chairman 
Goodlatte to move legislation to address the inequity they face every 
day. Many of these businesses were from the chairman's home State of 
Virginia.
  How long can we expect our small businesses that are partners in our 
communities to stay in business when we are tying one hand behind their 
back?
  I urge them to hold on as long as possible, but the only real 
solution is for Congress to act.
  I strongly urge my colleagues in the House, Chairman Goodlatte, and 
others, to give Main Street retailers a fighting chance by passing 
sales tax fairness legislation as soon as possible.
  We welcome the opportunity to work with our House colleagues so that 
one day soon we can offer businesses and States a solution to level the 
playing field for retailers that is simple and fair.
  In closing, I want to recognize the work Senators Enzi, Alexander, 
and Heitkamp have done on this issue.
  Senator Enzi introduced the first bill more than a decade ago to 
level the playing field because he understands firsthand, being a 
former retailer, how unfair this is for Main Street retailers.
  Last year when we passed the Marketplace Fairness Act we came one 
step closer to leveling this playing field by allowing States to 
require both brick and mortar retailers and online retailers to play by 
the same set of rules.
  It will ensure that Main Street businesses, like Abt, have a fighting 
chance and no more stores will have to close because of the current 
inequity they face.
  Again, I urge the House to pass sales tax fairness legislation. I 
hope that the House Judiciary Committee will move forward in the coming 
weeks and offer any help I can give.
  I am not going to take much longer. I think we have covered the 
subject well, and I thank Senator Enzi from Wyoming, as well as Senator 
Heitkamp from North Dakota, and especially Senator Alexander from 
Tennessee for kicking this off.
  I ask unanimous consent to have printed in the Record this article by 
Donnie Eatherly. Donnie is the president of P&E Distributors in 
Tennessee. He is also a member of the Alliance for Main Street Fairness 
Small Business Advisory Board. He wrote this article on May 6 that is 
entitled: ``It's Time To Level The Playing Field For Main Street 
Businesses,'' and it is a good article. It says, in the simplest terms, 
what he, as a businessman, sees this issue to mean.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

[[Page S2712]]

                       (Commentary, May 6, 2014)

    It's Time To Level the Playing Field for Main Street Businesses

                          (By Donnie Eatherly)

       Small-business owners like myself have for years urged 
     Congress to create a level playing field that will allow us 
     to compete with our online-only competitors. One year ago 
     this week, the Senate overwhelmingly passed legislation that 
     would accomplish this goal, and we're counting on the 
     Republican-led House of Representatives to do the same.
       Thanks to an antiquated tax loophole, large out-of-state 
     online retailers can avoid collecting state sales tax on 
     purchases made by residents in my state, which gives them a 
     significant 9.75 percent competitive advantage over 
     traditional brick-and-mortar shops that follow the law and 
     collect those taxes.
       To fix this unfair system, a bipartisan group of 69 
     senators last year passed the Marketplace Fairness Act, a 
     common-sense reform that would ensure all businesses play by 
     the same rules. Unfortunately, the legislation has stalled in 
     the House.
       As each week passes with no action, brick-and-mortar 
     businesses continue losing sales to a common practice known 
     as ``showrooming,'' in which customers browse and test items 
     at local stores and then head home to buy them online knowing 
     they will not have to pay state sales tax.
       For many small businesses such as mine, every sale counts 
     and losing this revenue hurts our ability to grow our 
     businesses and hire new employees. We cannot wait any longer 
     for a federal solution to this problem.
       Main Street business owners are not asking for a handout, 
     and we're certainly not afraid of competition from the big 
     guys. But it simply does not make sense for out-of-state 
     online retailers to enjoy such a big competitive edge over 
     local businesses that give back to their communities.
       Despite what some have said about the Marketplace Fairness 
     Act, this is not a new tax, nor does it create any taxes. 
     These taxes are already on the books, and the legislation 
     would simply give states the necessary tools to collect them. 
     As conservative Republican Rep. Steve Womack of Arkansas has 
     said, ``It's not new, it's due!''
       Not only does this level the playing field for all 
     businesses, but it would also put additional revenues in 
     state coffers to fund vital services such as education and 
     public safety. Importantly, the legislation also includes a 
     $1 million exemption on remote sales so to put that into 
     perspective, over 99 percent of all online sellers will not 
     be affected by this legislation in any way. In other words, 
     all the mom and pop stores who do business on the Internet 
     don't have to worry about it.
       Additionally, for the less than 1 percent of online sellers 
     who will be subject to collecting sales and use taxes under 
     this bill, the legislation requires each participating state 
     to provide free tax software that will allow them to quickly 
     and efficiently calculate, collect and remit sales tax. The 
     proposal also includes liability protections for sellers and 
     limits against audits.
       This reform is long overdue, and Main Street businesses 
     cannot wait any longer for help. For those who believe in 
     state's rights and the basic principle of limited government, 
     we should all agree that Washington, D.C., should no longer 
     be in the business of picking winners and losers in the 
     marketplace.
       It's time for the House of Representatives to stand up for 
     the small businesses in their districts, follow the Senate's 
     lead and finally pass marketplace fairness.

  Mr. DURBIN. So let's get together. We did it in the Senate on a 
bipartisan basis, with a big vote--some 69 votes. We can do it in the 
House of Representatives. Let's get something done this year that is 
going to help businesses across America be profitable and hire more 
people, put more folks to work across the United States.
  At this time, I yield the floor to my friend from Wyoming.
  The PRESIDING OFFICER. The Senator from Wyoming.
  Mr. ENZI. Mr. President, I want to thank the Senator from Illinois 
for his excellent explanation. I have been joining him and watching him 
do that for several years. It would be nice to get this finished.
  There are a few things we may not have mentioned that are sometimes 
raised when people ask me about marketplace fairness. One of them is 
from small towns. They say: We have to go on the Internet because there 
is not enough selection in our town and we can get things we cannot buy 
in town and some of the things we can get at a lower price by going out 
of town.
  I always ask them, when they are figuring that lower price, are they 
figuring it without sales tax or with sales tax, because it is not 
truly a lower price if what you are doing is just cheating your local 
merchant out of the right to collect the sales tax--which he does not 
get paid for anyway--and submitting it, when the out-of-State retailer 
does not have to do that.
  As to the revenue that companies are voluntarily collecting now--and 
there are a number of them that recognize it is difficult for everybody 
to keep track of their purchases, so they voluntarily collect it--the 
question I have had is, Does that money they voluntarily collect go 
back to the States? Yes, it absolutely does, and it will work that way 
under the bill as well. It is not money that you are just sending to 
wherever you ordered it from. You are sending it to where it was 
ordered from, and then they are sending it back to States.
  That is what these programs the Senator from Illinois mentioned do. 
They keep track of what State all the purchases were from. Here is how 
difficult that is. When you call in your order or you do it online, at 
some point you have to put in an address with a ZIP Code. That ZIP Code 
is all the program needs in order to be able to assess your tax. That 
is how those programs are designed. So if you have to give an address, 
you have to give the ZIP Code. If you have to give the ZIP Code, they 
already know what the tax is going to be. So there is no difficulty for 
any size retailer to be able to figure out what the tax is they are 
supposed to be doing.
  Another argument I hear is the online place provides free shipping. I 
want you to know your local retailer provides free shipping and 
immediate pickup. Somebody had to pay the shipping on it. It got to the 
store, and you can pick it up right there, instantly. You do not have 
to wait 2 or 3 days or pay a special rate to get it overnight. You can 
get it right then.
  One of the things that is discouraging for retailers is, if you 
waited on somebody and they got the barcode and they ordered it online 
and it came in and it was not exactly what they wanted, then they come 
to you and say: Well, this is the brand you are selling. Won't you take 
it back?
  Let's see, they did not make anything on it, they used a whole bunch 
of time, and now they want you to put it in your inventory. That is 
very discouraging.
  So think about those local clerks. They are your friends and 
neighbors who are being hired locally who really depend on a job. If 
everything gets ordered online, they will not have a job. Your friends 
will have to move, and you will not have as much selection as you have 
right now in your local store.
  Again, I wish to thank all those who voted for it, all those who have 
worked on it, and all those who are considering voting for it the next 
time they get it because I know we have picked up some momentum since 
we did it last time. There are people who have heard from their 
communities now who say: Well, I did not vote right last time, but I 
will get it right next time. I am looking forward to that, and I am 
looking for the House to finish it and send it to the President.
  Thanks again, I say to Senator Durbin, for his tremendous effort.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Illinois.

                          ____________________