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Public Statements

Marketplace Fairness Act of 2013

Floor Speech

By:
Date:
Location: Washington, DC

The Senator makes a great point. If States have not voluntarily entered into compacts where they get to collect their own sales tax for other States where it is a mutually beneficial relationship, then it is very strange to have to be compelled--even those 45 States that have sales tax obviously were not so excited about forming such a structure. They also seem determined to pull into this involuntary structure States that find the sales tax abhorrent. If they find a tax abhorrent--and just a little bit of background there. I believe our State has voted nine times on a sales tax. Largely the vote has been on heavy majorities defeating it. Many of those votes are 70 to 30.

Some of those reasons for that is because it is an extremely regressive tax. Another reason is that it is an expensive tax to collect; therefore, it is much less efficient and much more government waste.

Now we have all these Senators who are champions of government waste not only forcing an extension of their own State's wasteful tax system, but imposing it upon the small businesses of Oregon. Then we come to a whole series of concerns that any small business is going to have in this situation.

A small business is told they must participate, and basically anything beyond a single-person shop is pulled into this bill. Then they are subjected to--I think it is over 800 tax jurisdictions--having to call them and say: We are not sure you gave us the right amount.

Is there anything in this bill that says those hundreds of tax jurisdictions out there cannot call and basically challenge whether they have the right amount of money?

BREAK IN TRANSCRIPT

Mr. President, I think about the small businesses that would be subject to so many jurisdictions that they now have a tax relationship with and the responsibility to collect for and the possibility of having to basically call them and say: Well, you didn't do it right; you didn't use the right amount or the right software or this or that.

I can't imagine any small business wanting to be exposed to, as my colleague pointed out, 9,000--and even if it is consolidated into 800, that is still a lot of people to deal with. If we have to deal with five or six, that is overwhelming. But then the question becomes whether those States have the power to audit the Oregon small businesses as collectors of a tax, just as they might audit any other group that was collecting sales tax for their State.

BREAK IN TRANSCRIPT

Well, I appreciate the Senator expanding on that.

On page 6 of this bill, there is a line that starts out very promising: ``Relieve remote sellers and certified software providers from liability to the State or locality for incorrect collection and remittance ..... '' Well, that sounds OK. That sounds as though you are not subject to an audit. But then it goes on to say, only from basically an error in the software provided by the State. In other words, if a mistake is made, a business owner is subject to all of the same things as if their efforts were inside the State of New York, and that means subject to the State organizations inside the government of New York, that means audits, that means fees. It could include court actions.

So we are talking about, as the Senator put it, 9,000 jurisdictions that now can make life completely unmanageable. It would only take 2 or 3 to make it unmanageable, but 9,000 can make it unmanageable for a small business in Oregon.

Now, my colleague from Illinois has said it is OK for small business because we put in an exemption for selling $1 million online. That is no kind of an exemption at all. Let me explain. Let's say a small business is selling $1 million online and they have a 5-percent margin. That means they are making $50,000 a year. After they basically recognize that a person is working for themselves--they have no benefits separate from that--that is a very modest, middle income. That is one person. So this has an exemption for only a business of one--a modestly successful business of one--which means every other business in the State that is engaged online is subject to this provision.

So while others may feel comfortable telling their home State small businesses--and this would include those in the 45 sales tax States--that they are subject to audits and fees and court action from 9,000 other entities, I am certainly not comfortable telling the small businesses of Oregon they are going to be facing this type of incredible bureaucracy created by some of the folks who come to the floor and say they are all about small business.

Now, they want small businesses to be audited and fee'd and asked to turn up in some other State for a hearing. That is an outrageous attack on small business, not to mention our States that do not have a sales tax. It is an outrageous overplay attacking States rights.

I thank my senior Senator for his championing and his leadership and his longtime defense of the Internet as a place of fair transactions for small businesses and large, as a tax-free zone. I hope this Chamber is not engaging in a course that is going to change that dramatically, as it seems so intent on doing at this moment.

I am very struck by the correct point my colleague made about foreign companies. Here we have a company in Canada that is not subject to this bill. We have a company in Mexico that is not subject to this bill. For that matter, we have a company in Nigeria or anywhere else in the world not subject to this bill. So when American businesses say we should maintain a level playing field to keep business in America, allow us to play on a level playing field, they are certainly hoping we won't pass something such as this that gives such an enormous advantage to other nations.

I must say that constituents have been weighing in on this issue. I don't think it would surprise anyone to know that they don't like it. Ninety-eight percent are writing in to us to say: We don't like it. We don't like the idea of other States auditing our businesses. We don't like being asked to be a tax collection agency for another State.

Oregon is not asking anyone else to do that unless they have a State-to-State compact, which is exactly the way this could have been done and should have been done but hasn't been done because the States couldn't agree, even though they were sales tax States. That tells us quite a lot.

They don't like the idea of being subject to bureaucrats or the potential for legal action where they might have to travel to another State, and they don't like the idea that there is absolutely no compensation for the enormous imposition this bill places on the small businesses of Oregon. That is quite a lot not to like. So, of course, it is 98 percent against this bill.


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