[Congressional Record Volume 161, Number 182 (Tuesday, December 15, 2015)]
[Senate]
[Pages S8648-S8650]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        MARKETPLACE FAIRNESS ACT

  Mr. DURBIN. Mr. President, 2 years ago Members of the Senate did 
something that doesn't happen very often. We broke through the gridlock 
and came together to pass meaningful bipartisan legislation that was 
called the Marketplace Fairness Act. Senator Mike Enzi, a Republican 
from Wyoming, has been the leader on this issue from the start. Senator 
Lamar Alexander, a Republican from Tennessee, has been an invaluable 
ally. Senator Heidi Heitkamp, a relatively new Member of the Senate but 
a person with extraordinary knowledge of this field, joined me and 65 
others to pass legislation that would level the playing field for Main 
Street businesses all across America and allow States and localities to 
collect sales and use taxes that are already owed under the law.
  Since that time--that glorious time 2 years ago--what has happened? 
Nothing--the bill passed the Senate, went to the House, and 
disappeared.
  In the face of this obstruction, a bipartisan group of Senators have 
said we will oppose any long-term extension of legislation that would 
take away a State's right to collect taxes on accessing the Internet 
unless we give States the ability to collect taxes on Internet sales 
that are already owed.
  The Internet Tax Freedom Act is a law which is going to expire with 
the continuing resolution--which I would support--and it says that 
States and localities cannot impose a tax on access to the Internet. I 
think that is sound policy. But what we are asking in return is to 
allow those who use the Internet to make retail purchases to pay the 
sales taxes they already owe for their purchases. It is that simple. It 
is not fair to tie the hands of States and localities to collect the 
revenue they need to fund law enforcement, public schools, 
infrastructure, and other vital services without providing a path for 
States and localities to replace the revenue if they choose.
  The Marketplace Fairness Act levels the playing field for retailers 
by allowing States to treat all retailers--whether it is a brick-and-
mortar store or online--the same when it comes to collecting sales and 
use taxes. It is not a new tax. We are talking about existing taxes and 
their collection. In Illinois we have a quaint way of dealing with 
this. I recall a few years ago, when I was doing my State income tax 
returns, the bookkeeper called and said: Do you want to declare your

[[Page S8649]]

Internet purchases and pay the sales taxes you owe? I said: Of course I 
want to pay the taxes I owe. How do you do that?

  Well, you declare them on your State income tax return in Illinois. 
There is no proof. It is your word, and the fact that you sign is what 
the State goes by. I estimated my Internet purchases that had not been 
subject to sales tax and paid the appropriate tax in Illinois. It turns 
out that very few people in my State who actually do make retail 
purchases over the Internet pay this tax. We are trying to change that. 
The change is very simple: If you are an Internet retailer, such as 
Amazon--the largest in the United States--and I make a purchase for the 
holidays and I declare my ZIP Code at the end of my address, Amazon 
then knows by my ZIP Code how much to be collected in sales tax. They 
assess me that with the purchase, take that amount and send it back to 
the Illinois Department of Revenue for distribution. It is so simple 
that there is basic software available, at a very modest cost, that any 
retailer can use to make that same calculation. There is nothing exotic 
or difficult in the process, but that is what is missing.
  Amazon--I use them as an example--actually collects sales tax, and 
they support our marketplace fairness bill, as do many other Internet 
retailers. The difficulty we have run into, though, is there is a 
resistance to giving fairer treatment to stores across America that are 
collecting sales taxes every day against retailers on the Internet that 
may or may not collect those taxes themselves.
  What difference does it make? I have talked to some of the people who 
run big chain stores, and they say it has reached a point that 
something has to be done. Consumers come into a store, a major store, 
and they ask to see certain products--running shoes, bicycles, flat-
screen TVs. They pick the one they like the best, write down all the 
information about it, and they are never seen again. Some of them do 
have the nerve to return at a later date when they make their purchase 
over the Internet to the bricks-and-mortar store when they are 
dissatisfied with the product. Of course the bricks and mortar store 
had nothing to do with the sale of the product. They are being asked to 
provide some consumer relations on a product they didn't even sell.
  What is happening? Take a look at the last Thanksgiving holiday 
weekend--one of the biggest retail weekends of the year. Early reports 
suggest that the stores on Main Street and shopping malls across 
America had flat sales compared to last year. How about Internet retail 
sales for that weekend? They were up significantly across America.
  What we are looking for is parity and some equality. It is not fair 
to say to the store down the block that is paying the rent, paying the 
property taxes, and collecting the sales taxes that we are going to put 
them at a disadvantage to their Internet competitors. Internet 
retailers benefit under our current system, sadly, because they don't 
charge for sales tax--many of them don't. They have a 5-percent or 10-
percent advantage over Main Street competitors. When you ask many of 
these Internet retailers whether they want to continue the current 
system, they say: Of course, it gives us a break.
  It is not fair, it is not right, and it should be changed. Products 
sold online seem cheaper when sales and use taxes are not collected at 
the point of sale, but we all know that tax is still owed by the 
customers. Thousands of Main Street businesses have worked hard to grow 
their businesses. They employ local people. Now they have become 
nothing but show rooms because of this unfairness. Examples: Steve 
Sahli from Play It Again Sports in Naperville, IL, knows this issue of 
showrooming all too well. For more than 20 years, Play It Again Sports 
has been serving the Naperville, IL, community. People come into the 
store, they try out big-ticket items, use their phones sometimes to 
take a picture, walk out the door, and buy the item online.
  Soccer Plus in Palatine, IL, is an example of what happens when it 
becomes too difficult to compete with online retailers because of their 
price advantage. Two years ago, Soccer Plus went out of business. We 
lost good-paying jobs in Palatine, and Palatine lost a business that 
was paying its property taxes, employing all the people, and sustaining 
the services of that good city. There is nothing we can do for Soccer 
Plus now, but we can still help other retailers avoid that same fate.
  Even with countless stories like these, the House of Representatives 
has refused to address this issue. Numerous requests to the chairman of 
the House Judiciary Committee to mark up e-fairness legislation from 
ranking members and other members have not resulted in any action 
whatsoever. The chairman of the House Judiciary Committee is calling 
for regular order when it comes to e-fairness legislation but has 
refused to even hold a legislative hearing on the only e-fairness 
legislation to be introduced in the House. That was by Representative 
Jason Chaffetz, a Republican from Utah. He introduced the bipartisan 
Remote Transactions Parity Act. We have worked on a bipartisan basis in 
the Senate with Congressman Chaffetz, Congressman Womack, and others to 
come up with a bill that we think is fair that can pass. All we are 
asking for is a day in court--a legislative hearing, a markup, and 
bring the matter to the floor of the House. The chairman of the House 
Judiciary Committee has refused to work with us on this legislation. He 
has his own approach. I disagree with it, but let's have the debate. 
Let's have the vote. Isn't that what Congress is supposed to be all 
about? These calls for regular order are nothing more than veiled 
attempts to delay and obstruct in the House. Let's have regular order. 
Let's bring up the Chaffetz measure. If the chairman of the Judiciary 
Committee in the House has his own alternative, let him offer that as 
well.
  While House leadership calls for regular order on legislation to 
level the playing field for Main Street retailers, they bypassed 
regular order by airdropping a permanent extension of the Internet Tax 
Freedom Act into a totally unrelated bill. It was a bill in Customs 
relating to trade agreements. At the very last minute, they dropped in 
this provision for the permanent Internet Tax Freedom Act.
  The same Members of Congress calling for regular order on e-fairness 
legislation skipped regular order when it came to the Internet Tax 
Freedom Act. Last week, the Customs reauthorization conference report, 
which reformed some of our Customs and trade law, was released. Many 
were surprised to find deep in the bill on page 381 a brand new 
provision that had nothing to do with Customs, nothing to do with 
trade, has not had a recent hearing in the Senate and was dropped in at 
the last minute in this bill--the permanent Internet Tax Freedom Act.
  This provision wasn't in the bill that passed either the House or the 
Senate. It is what happens toward the end of the legislative session 
when things go bump in the dark. Internet Tax Freedom Act hasn't even 
been considered by this body. Yet there it was in a conference report 
meant to resolve differences that had been debated for months.
  I do not support the permanent extension of the Internet Tax Freedom 
Act in the conference report. I am going to oppose any other attempt to 
move anything longer than the remaining 9-month extension of the 
Internet Tax Freedom Act until September 30, 2016. I support the merits 
of the legislation, but it is grossly unfair to speed this through with 
an airdrop in a conference report without any hearing and to do it at 
the disadvantage of retailers and businesses across America.
  A long-term extension of the Internet Tax Freedom Act should be 
paired with the Marketplace Fairness Act. We can make them both 
permanent law. Let's do it and do it together. Let me explain why. We 
should not cut off States and localities at the knees by preventing 
them from collecting tax revenues, by reducing Federal funding, and 
without also providing State and local governments the authority to 
collect the taxes already owed. The Federal Government has cut funding 
for States and local governments over the last several years in an 
attempt to put the Federal Government on the right fiscal path. Tough 
decisions have had to be made. Many States and local governments are 
struggling, even in my State. In a one-two punch, some in Congress want 
to increase this burden by permanently

[[Page S8650]]

preventing States and localities from imposing certain types of taxes 
while denying them the authority to collect sales and tax revenue that 
is already owed to them.
  In 2015 alone, my State of Illinois will lose at least $390 million 
under the Internet Tax Freedom Act. Chicago will lose $197 million. 
Springfield will lose $6 million. How do we expect States and 
localities to fund first responders, firefighters, emergency services, 
911 dispatch, health care services, local road maintenance, and all the 
other services that support our community? Unlike the Federal 
Government, States and localities can't run deficits to continue these 
services. The only option they have is to raise other taxes, such as 
property taxes, or to cut vital services.
  There is a reasonable path forward. Congress should pass both a long-
term extension of the Internet Tax Freedom Act--which says we will not 
impose State and local taxes on access to the Internet--and pass the 
Marketplace Fairness Act, which allows States to opt in so Internet 
retailers selling in their State will collect the sales tax due and 
remit to the States and localities.
  I hope my colleagues in the House will work with me to do that. I 
welcome the opportunity to have a serious dialogue about how to move 
both pieces of legislation forward in an expeditious manner.
  Mr. President, I yield the floor.
  Mr. LEAHY. Mr. President, will the Senator yield to me for just a 
moment?
  Mr. DURBIN. I am happy to yield to my friend and colleague from 
Vermont.
  Mr. LEAHY. Mr. President, I hope both Senators and Members of the 
other body listened to what the distinguished senior Senator from 
Illinois just said. We all extol the virtues of Main Street America--
small towns, big towns. I think of the businesses I go into every time 
I am home in Vermont. These are hard-working people. They are people 
who support the Little League, the Boy Scout troops, help with all the 
various charitable drives. And they're being treated unfairly.
  What the Senator from Illinois said is absolutely right. There are 
two different issues. Let's start leveling the playing field. Let's 
start worrying as much about the citizens of our own community, the 
people who make our communities work, as we do about some conglomerate 
that none of us ever see, and our communities never see. So I am proud 
to say I strongly support what the Senator from Illinois has done.
  I yield the floor.
  Mr. DURBIN. I thank the Senator from Vermont for his comments.
  I yield the floor.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The senior assistant legislative clerk proceeded to call the roll.
  Mr. COONS. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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