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Public Statements

Marketplace Fairness Act

Floor Speech

By:
Date:
Location: Washington, DC

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Mr. ROCKEFELLER. Mr. President, we have an important opportunity this week, or before, to help small and local businesses all across our country. We have an opportunity to help the kinds of local businesses that make our small towns and rural States so warm and inviting. These businesses attract tourists because of the nature of their smallness.

Everything is not big. Everything that is big is not necessarily friendly. Small businesses are almost always friendly. Today these same small and local businesses are competing on a very unfair playing field. This is an issue I have cared about ever since the Internet was created. I felt strongly about it then and I feel strongly about it now--except even more so.

For over 20 years States have been unable to enforce their own sales tax laws on sales by out-of-State catalog and online sellers due to something I am familiar with only because of the specificity of the issue to the 1992 Supreme Court decision Quill Corp. v. North Dakota.

Sales tax is not collected for most Internet transactions, so consumers know they can benefit from a 5- to 10-percent discount online, and they know that before they go into a store. In fact, something that is even more discouraging--because I have made a point of watching it--also takes place, and that is what cell phones can do for shoppers. I have seen shoppers in various small shops, such as craft shops, tool shops, and other various kinds of Main Street shops, come in and look at the merchandise. They pick over the merchandise, compare it, decide what they like, and take a picture of it. While still in that small store, they go online and buy it, thus avoiding having to pay a sales tax.

They never have to leave the store--or they can. They can just look at their cell phone when they get home and then buy it if they want to.

This strikes me as profoundly unfair, so profoundly unfair that it is one of the easiest issues I think I have ever dealt with since I came to the Senate some time ago. It is profoundly unfair to traditional shops and small businesses to end up serving as the display case for consumers who see the product in person but buy it online to avoid paying sales tax--or maybe they aren't doing it deliberately to avoid paying sales tax. If they are well versed in the ways of life, they can do that because they know they will get a nice little discount. On the other hand, it is just a habit because States don't have the money--particularly small States such as mine--they don't have the money to possibly collect that or go after that.

I feel very strongly about sales taxes. For the most part sales taxes are used, about 70 percent of them are used in my State for boards of education, public education. I think that is probably true in most States. But, frankly, I just don't know. It is true in my State, so I care about it. My State, because of what I have just described--simply buying online and not having to pay a sales tax or anything--my State lost about $103 million last year alone. That is a pretty big chunk of our budget. That sounds silly to California. On the other hand, California loses about $4 trillion-plus because of this, and this simple bill would correct that situation and allow them to be able to have the software to do all this.

In West Virginia we are fighting to keep our small towns vibrant, and I think the good Presiding Officer understands what I mean by that. His State has a couple of big cities, but it has a lot of small towns. My daughter lives in one. Those small towns are the heart and soul--towns such as Newtown are the heart and soul of America, with good people, honest people, doing honest commerce.

We need local retailers to keep our small towns vibrant. I believe we can have both a vibrant Main Street economy and e-commerce businesses together, but we have to have them both. Let's be honest. Allowing States to collect sales tax for online purchases is not going to stop the growth of e-commerce.

My Commerce Committee held a hearing on this issue a couple of years ago, and we had a bunch of folks who made all kinds of claims, but then a lot more folks who said this isn't fair. It is not a fair way to do business.

Today's technology, with the tremendous advances made in recent years, makes tax collection simple, makes it cheap, makes it reliable. In many ways, the Internet is the perfect environment to collect sales taxes because it can be automated.

If Congress does nothing, we will end up with States forced to raise income or property taxes to offset the growing loss of sales tax revenue. That doesn't seem right or fair to me, and I feel strongly about it.

I know the Congress has worked on this issue for a long time. I recall Senator Enzi's original bill on this issue was referred to the Commerce Committee. Senators ENZI, DURBIN, and ALEXANDER are, from my point of view, to be enormously commended for their commitment on this issue, keeping up the good fight. I have always thought it was the right idea, and I cosponsored the very first bill just as I am cosponsoring this current bill.

When Senator Enzi first introduced this bill, it was not a popular idea. Over time more people have come to understand that this is an issue of basic fairness--really just that word, ``fairness''--to make it possible to allow people to compete on a correct basis, and it is terribly critical to our States' fiscal health. So that is why I stand here excited to see a growing bipartisan consensus in this Chamber to pass the Marketplace Fairness Act. I commend its authors. By a vote of 75 to 24, the Senate recently supported the inclusion of this bill in the budget resolution. I hope we can finish the bill soon and level the playing field once and for all.

I wish to close by saying this bill is ultimately about fairness. It would allow small and local businesses--the kind that dot every town all across the United States--a chance to play on a level playing field and, in fact, in some cases a chance to operate, to be in business. By passing this bill in the next several days, we can restore fairness to small and local businesses.

I thank the Presiding Officer. I yield the floor and note the absence of a quorum.

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