[Congressional Record (Bound Edition), Volume 159 (2013), Part 4]
[Senate]
[Pages 5637-5638]
[From the U.S. Government Publishing Office, www.gpo.gov]




                        MARKETPLACE FAIRNESS ACT

  Mr. ALEXANDER. Mr. President, I know Senator Barrasso is coming, but 
until he does, I wish to make a few comments about the Marketplace 
Fairness Act, which is the legislation before us today, and especially, 
to begin with, Senator Heitkamp's address, the new Senator from North 
Dakota.
  It is rare that a new Senator has a chance to come to the Senate and 
in her first few months find us debating a bill she brought when she 
was a State official in North Dakota 20 years ago. That shows why the 
Senate is a good place for people with a little bit of experience 
because she can bring to us exactly what we are talking about.
  Her story about the small business people who are making a few 
dollars and have a very small margin for profit and then who are 
discriminated against by out-of-State sellers who don't have to collect 
the tax that is already owed is a real story, and she made a remarkably 
good address and I compliment her for that and welcome her to the 
Senate.
  Sometimes we launch into these complicated debates without saying 
what we are talking about. Let me see if I can say in a few simple 
words exactly what we are talking about here.
  My wife gave me an ice cream freezer for my birthday last year. She 
got it from Williams-Sonoma. It is not one of those freezers you have 
to crank, as I did when I was a kid, and when you eat the ice cream it 
makes your head hurt because you would eat it too fast. This is a 
modern ice cream freezer, and you mix the stuff up and put it in, and 
after a while here comes the ice cream. But then I discovered that 
Williams-Sonoma also sells a mix you can order and that makes it even 
easier. So I ordered the mix.
  Williams-Sonoma has stores in Tennessee, but I ordered mine online. I 
don't do this very much so I am not the best online purchaser who is 
around. But I looked up the catalog number, punched a few buttons on my 
computer, and I ordered my ice cream ingredients. It asked for my name, 
address, and the information on my credit card. And with that 
information, two things happened: I ordered the ingredients and they 
arrived within a few days. But Williams-Sonoma, through the Internet, 
determined from my ZIP Code what the sales tax is in Tennessee and in 
my home county and will remit it electronically to the State of 
Tennessee. That is what we are talking about.
  If I go to the Williams-Sonoma store in Nashville and I buy the ice 
cream freezer or the ingredients, they add our 10-percent sales tax to 
it. If I order it online from Williams-Sonoma, they add the 10 percent, 
too, because I put my ZIP Code in. The way software is today, it is 
very simple to find out what the tax is in any jurisdiction. It is as 
easy as finding out the weather. If I want to know the weather in 
Maryville, TN, I put weather 37205. That is my ZIP Code. I find out the 
weather. Williams-Sonoma can find out the tax I owe on the ice cream 
ingredients that way.
  So the Williams-Sonoma store in Nashville collects the tax, and they 
have to do it by law. That is part of their business responsibility in 
the State of Tennessee. The Williams-Sonoma store online collects the 
tax because they have stores in Tennessee. But lots of other out-of-
State sellers do not collect the tax that is already owed. It is owed.
  It is said there is a new tax here. I don't know where everybody got 
that. They must not have read the bill carefully. The U.S. Congress 
can't change the sales tax in Tennessee. We can't impose it, we can't 
lower it, we can't raise it. That is under the responsibility of the 
sovereign State of Tennessee.
  This bill has nothing to do with the Federal Tax Code. Caterpillars 
have as much to do with the Federal Tax Code as this bill does. So it 
has nothing to do with taxes. This bill has to do with two words, and 
two words alone: States rights. Or you could substitute those two words 
with Tenth Amendment.
  Do we believe here in the Senate that the Governor of Tennessee or 
Massachusetts or Kentucky or Wyoming or anywhere else has to come here 
and play ``mother, may I'' to ask permission to decide what the State 
tax policy ought to be in Tennessee?
  Tennessee imposes its own State sales tax. That is its decision. We 
do not have a State income tax. That is Tennessee's decision. Some 
States do. States have the right to be right; States have the right to 
be wrong. That came with our constitutional framework. We ignore it all 
the time.
  A lot of Senators who fly to Washington somehow get the idea--if they 
can get through the delay on the tarmac everybody else is experiencing 
right now--that this 1-hour flight makes them smarter because they flew 
up here. No, it doesn't make us smarter. In fact, we ought to leave to 
States the responsibilities that States are supposed to have--whether 
it is in education or in health care or anything else, but certainly in 
matters of State tax policy. We shouldn't be trying to tell Tennessee 
or Massachusetts or anybody else what their taxes ought to be.
  What we are doing with this bill is we are doing what the Supreme 
Court said we are the best persons to do. That is what Senator Heitkamp 
said a little while ago. We are the ones to write the rules to say: 
States, of course, may decide whether they want to collect the State 
sales tax and use tax from all the people who owe it or some of the 
people who owe it. That is what the issue is.
  Let's say we pass the Marketplace Fairness Act. It says that 
Tennessee can make its own decision about how it collects its sales tax 
and its use tax. Tennessee could decide it wants to discriminate 
against the Nashville Boot Company that sells boots out the front door, 
collects the sales tax, and sends it to the State. Let's discriminate 
against the Nashville Boot Company and tell the out-of-State seller of 
boots, You don't have to do that. Or, the State may decide--as I am 
sure it will, because the Governor, the Lieutenant Governor, and the 
legislators have told me they will. They may decide: We don't pick and 
choose between winners and losers, we don't pick and choose between 
taxpayers, we don't pick and choose between businesses. We want a level 
playing field. So we are going to say to the out-of-State seller--
catalog, online, or whatever it is--welcome. You can sell in Tennessee 
if you play by the same rules that people who live in Tennessee do. 
That is all you have to do.
  So the States are going to require, as it does, the Nashville Boot 
Company, the Williams-Sonoma store, the service station, the drugstore, 
to collect the sales tax and send it in to the States, and it is going 
to require the out-of-State seller to do the same thing. That is all we 
are talking about. If the out-of-State seller doesn't want to do it, it

[[Page 5638]]

doesn't have to. Nobody is requiring people to sell their stuff in 
Tennessee. It is a free country. It is a big country. It is a big 
market. We produce 25 percent of all the money in the world. If you 
don't like Tennessee's rules, as long as they fit the constitutional 
framework of not imposing a burden on interstate commerce, you don't 
have to sell in Tennessee. We hope you will. And if it is as easy for 
you to collect the tax as it is to find out the weather in your 
hometown, we don't know why you wouldn't.
  We don't know why you would even expect that you would be treated 
better than somebody who lives in Tennessee and goes to work every day 
in Tennessee and pays taxes in Tennessee and collects taxes in 
Tennessee. We will treat you just as well as we do the local folks, but 
we are not going to treat you any better and put you at an advantage 
with our hometown businesses. That is what this is about, and that is 
all it is about.
  Let's make clear what this is not. It is not a tax. It is about taxes 
already owed. It is not a Federal tax. It is State taxes already owed. 
Sales taxes and use taxes, that is all we are talking about.
  Are we telling any State they must do this or must do that? No. We 
are saying to States that we are simply affirming the spirit of the 
Tenth Amendment, which says: You have the right to decide for yourself, 
Mr. Governor, Ms. Legislator, what your State tax structure ought to 
be. It is up to you. If you want to have just some people pay the sales 
taxes and use taxes that are owed and other people to not pay them, 
that is up to you too. That is your business. But this is a States 
rights Tenth Amendment decision that leaves to the States this ability.
  I wanted to talk mostly about what we are talking about: We are 
talking about what happens when you buy something online, from a 
catalog, and the local store, and making sure that States are able, if 
they wish, to treat all businesses in the same way. That is why so many 
conservative leaders, as they have understood this bill, have come to 
support it.
  This is a rarity in the Senate. This is an 11-page bill. Some people 
say it has been rushed. I wish to respectfully disagree with that. This 
legislation was introduced beginning in 2001. It was introduced in 
almost exactly the same form in 2011. It had a full hearing in the 
Senate Commerce Committee in 2011 in almost the same form of the 11-
page bill that is before us today. Exactly this bill was filed on 
February 14, 2013, so everyone has had plenty of time to read it since 
February 14.
  This is a bill that has been here for a long time, and the reason it 
is before us and hasn't come through the Finance Committee is because 
the Finance Committee simply wouldn't hear it, act on it, and report 
it. We have a chance to amend it. The majority leader has said there 
will be amendments. It is my hope that Senators will come to the floor 
with their amendments as early as this afternoon. I hope Senators would 
want to keep amendments aimed at the subject of the debate, the 
marketplace fairness debate. There are many issues that have been 
raised. Let's bring them up, let's debate them, and let's vote on them. 
That is what we do when we are acting properly in the Senate.
  I mentioned some of the conservative leaders who have talked about 
this issue. William F. Buckley, before he died, talked about the 
unfairness of treating instate sellers one way and out-of-State sellers 
another way. Another leading advocate for the idea of marketplace 
fairness is Al Cardenas, who is chairman of the American Conservative 
Union. He has written eloquently about it.
  Former Governor Jeb Bush, former Governor Mitch Daniels, Governor 
Mike Pence, the Congressman from Indiana--these are leading 
conservatives on the Republican side. They have all said if Congress 
does not act, it freezes into place a system that picks and chooses 
among winners and losers, that treats one taxpayer one way and one 
business another way. That is not a good principle. That is not a good 
conservative principle at all. That is why so many of the Republican 
Governors, the Republican leaders--Art Laffer, President Reagan's 
favorite economist and distinguished writer, wrote in the Wall Street 
Journal last week that it would actually help economic growth if States 
were permitted to collect taxes from all of the people who owe it 
rather than some of the people who owe it. Mr. Laffer said, and I am 
paraphrasing, that the best tax policy is one that, when there has to 
be a tax, taxes the largest number of people at the lowest possible 
rate.
  Governor Haslam of Tennessee, Governor Otter of Idaho, many of the 
Governors have said if we have the opportunity to collect the taxes 
from everybody who already owes them, we have in mind a tax rate we 
would like to lower. We would like to have a lower sales tax rate in 
Tennessee. We don't like a 10-percent tax rate. One reason we have it 
is because some people do not pay it even though they owe it. The 
reason they do not pay it is because out-of-State sellers--catalog, 
online--many of them do not collect it as others will do.
  I think that is a summary of the legislation before us. It is about 
States rights. It is an 11-page bill. It has been before the Senate for 
months. The idea has been before the Senate for years. It does not seek 
to tell any State to do anything.
  New Hampshire does not have a sales tax. After this law is passed New 
Hampshire citizens will not have to pay a sales tax. If a New Hampshire 
company or Michigan company sells in Tennessee they will have to do 
what Tennessee companies do, or anybody else who sells in Tennessee 
will have to collect the tax and send it to the State government--or 
not sell. But unlike 20 years ago, that is pretty easy today. As I have 
said, it is as easy as putting in a ZIP Code and finding out the 
weather. One can compute the tax the same way I found out what my ice 
cream ingredients from Williams-Sonoma cost and what the tax was, and 
in the same way I paid that tax.
  I look forward to the debate. I hope we can enact this bill. We have 
had 2 good votes: one at 74 votes and one at 75 votes. A majority of 
Democrats supported each vote. A majority of Republicans supported each 
vote. There is substantial support in the House of Representatives. 
This is an important States rights piece of legislation. It is part of 
our job to simplify things and not to require States to play ``Mother 
may I?'' with Congress about what their tax structure ought to be.

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