[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
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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
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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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