For more than 12 years, U.S. Senator Mike Enzi, R-Wyo., has been working to level the playing field between brick-and-mortar and online companies. Today, the Senate passed Enzi’s legislation 69-27, sending a strong bipartisan signal that states should be able to enforce their own laws and that the federal government should not favor one business over another or one taxpayer over another.
Enzi’s Marketplace Fairness Act, S. 743, would give state and local governments the ability to collect sales tax on out-of-state, catalog and online sales. No state would be forced to collect the sales tax, but would have the authority to make this decision if they so choose. Enzi said it’s a conversation state residents and their state legislators should be able to have.
“For more than a decade I have been working on a solution to put Main Street retailers and online and out-of-state companies on a level playing field,” said Enzi. “Not because it’s popular, but because it’s fair and it’s the right thing to do. The federal government should not have the right to tell a state how it can manage its finances. This doesn’t cause the federal government to do anything. What it allows is for the states to do what they have already passed laws on. No state should have to come to Washington asking for permission to enforce their own laws.”
Sales taxes go directly to state and local governments, which brings in needed revenue for maintaining schools, fixing roads and supporting local law enforcement. Not a dime would go to Washington. If sales over the Internet continue to go untaxed and electronic commerce continues to soar, revenues to state and local governments will plummet and the federal government does not have the money to help states, according to Enzi.
“When I was in the Wyoming state legislature, I know we never passed a law that discriminated against in-state people. We never put a burden on the people who pay the property tax, hire residents and participate in community events while telling those from outside Wyoming that we want them to have our money, but they don’t have to do anything in return. We never intended to give out-of-state businesses a free ride,” Enzi said.
Facts about what the Marketplace Fairness Act:
- The bill gives states the right to decide to collect – or not to collect – taxes that are already owed. It is 100% optional and requires state action before any sales tax collection could happen.
- The legislation would simplify the country’s more than 9,000 diverse sales tax jurisdictions and provide two voluntary options by which states could begin collecting sales taxes from online and catalog purchases.
- The bill would not tax the Internet or Internet services. It does not raise taxes or create any new taxes. It closes a sales tax loophole that puts local and Main Street retailers at a disadvantage.
- The bill exempts businesses with less than $1,000,000 in annual online or out-of-state sales from collection requirements.
The Marketplace Fairness Act is bipartisan legislation that is supported by Republican and Democrat governors, state legislators, and local officials nationwide. The bill is also supported by hundreds of Main Street retailers, business and trade associations, and online merchants. The list of supporters is attached to this release.
Click here to read a speech Sen. Enzi gave today on Marketplace Fairness as prepared for delivery.