Amazon Among Retailers, Organizations Supporting New Marketplace Fairness Act

The Marketplace Fairness Act would allow local Main Street retailers to compete on a level playing field against out-of-state Internet retailers, give states the ability to enforce their own sales and use tax laws reducing the need to raise taxes, and relieve consumers of the legal burden to report to state tax departments the sales taxes they owe on online purchases. This bill does not create new taxes or increase existing taxes.

Background

The Supreme Court held in its 1992 Quill that only Congress has the authority to regulate interstate commerce under the Commerce Clause and the current maze of state and local sales tax rules is too complicated to require remote retailers to collect sales taxes. The result is that states and local governments are prohibited from enforcing existing sales and use tax laws on the growing number of out-of-state sales.

The Marketplace Fairness Act allows states and local governments, if they so choose, to enforce existing state and local sales and use tax laws if they simplify sales and use tax administration and collection and exempt small online retailers from collection requirements. The bill would level the playing field for Main Street businesses that are currently at a competitive disadvantage because they must collect sales and use taxes while a growing number of remote retailers do not. It would provide a pathway for states and localities across the country to collect an estimated $23 billion annually in uncollected tax revenue to balance their budgets by collecting taxes already owed instead of increasing taxes or cutting vital services.

Marketplace Fairness Act

The bill provides states the authority to enforce existing sales and use tax laws, if they choose to do so, by adopting one of the following options:

• Streamlined Sales and Use Tax Agreement (SSUTA): Allows any state that is a member of SSUTA to require remote retailers to collect state and local sales and use taxes.

• Alternative Minimum Simplification Requirements: States that are not SSUTA members may require remote retailers to collect state and local sales and use taxes if they adopt minimum simplification requirements as outlined in the bill.

The legislation does not create new taxes or increase existing taxes: Consumers already owe sales and use taxes on the goods they purchase. The legislation simply provides states the authority to enforce existing state and local sales and use tax laws and eliminates the competitive advantage currently enjoyed by remote retailers at the expense of local businesses.

The bill is supported by over 200 business, labor, and state and local government organizations including the National Governors' Association, National Conference of State Legislatures, National Association of Counties, National League of Cities, Retail Industry Leaders Association, National Retail Federation, International Council of Shopping Centers, Amazon.com, and AFSCME.