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Mr. MANCHIN. I rise today to speak in support of the Marketplace Fairness Act. I was a cosponsor of this important legislation in the 112th Congress and I am proud to be a cosponsor in the 113th Congress, because this is truly a matter of fairness. The Marketplace Fairness Act will allow local Main Street--we call them brick and mortar, but they are basically businesses, little stores with real people in them, working hard to make a real living. It will provide much-needed financial relief to State budgets that have been cut to the bone in recent years and are facing even more cuts in Federal assistance thanks to what we were just discussing here, the disastrous sequestration with the Draconian cuts.
This bill is not a Washington handout to businesses. It is not a special treatment. It is not a new tax. It is leveling the playing field. It is a leveling of the playing field. Every day we do not act to pass the bill is another day we risk another small business closing its doors--not only in West Virginia but all across this country.
There is always a lot of talk in Washington about helping small businesses, and rightly so, because small businesses, as you know in your State, account for more than 60 percent of all the private sector jobs. It is the small businesses, not the large businesses.
The Marketplace Fairness Act is a chance to do more than just talk about it for once. We have a chance to do something to show we care about small businesses. It levels the playing field and gives our Main Street businesses a fighting chance competing with Internet vendors that are not required to collect sales tax.
Let me give an example in a small rural State such as West Virginia. We are expanding, working very hard on the Internet, broadband high speed, trying to get to every little holler, up and down every nook and cranny. We are trying to help the people, and that is great. But it really puts more pressure on small businesses, because now, with the convenience, people will not travel. They may not go to the store. But if they want the service and they know the price is the same, there is no unfair advantage, there is a level playing field, the small businesses still have a chance. That is all we are asking for.
Business owners in West Virginia tell me all the time how unfair it is to watch their online competitors offer low prices on the exact same products. We have heard a lot of talk about that today. That is called showrooming and that is basically people shopping. They used to go shopping in the old days. They would go to one store and compare and then go to another store and compare and they worked back and forth and figured out where they had the best deal or where they thought they had the best deal with the best service. That does not happen on line.
First of all, in my State they have a 6-percent advantage because our State tax is 6 percent in all our counties, so that is a 6-percent advantage from the get-go, and in these hard economic times price is the driving force.
That is why this bill has so much bipartisan support: 74 votes. Mr. President, you have been here a short period of time, but you are very observant. You know that. You have watched and seen very few times that we have gotten that type of broad bipartisan support on anything, and that is what is refreshing to see. With all of my friends who come from States that do not have the taxes, and friends on both sides--my own colleagues on the Democratic side and Republican side--what I understand, and what I know will happen, is first of all they do not collect the tax of in-State residents. If they buy it on the Internet, they will not collect that tax because they do not have a sales tax. If they say it is unfair because they are collecting it for me in my State, even though someone in West Virginia might buy from a State that doesn't have a sales tax but they have an Internet business, that is not going to cause undue pressure, I don't believe, or unfair competition in any way, shape, or form.
They still need to use all the services in my State while selling their product in a State where they don't have a sales tax. They are going to use the roads to deliver that product to the customer in my State, they are going to use the people who have been educated through the school system in my State, and all I am asking for is the fair share: the fairness--we charge our own customers and our own businesses collect for us in our State--for those who are using my State as their business to do the same. I don't think that is unfair. I really don't. I think the majority of businesses don't think that is unfair, and a majority of Americans don't think that is unfair.
This is not a complicated piece of legislation. It is only 11 pages. It is pretty short compared to most of the bills we see around here. Basically, it just does what we said: It allows the States to collect sales tax on out-of-State sales, provided these States streamline their tax codes.
There are some restrictions that come with this. They must either voluntarily adopt the measures in the streamlined sales and use tax law, which 24 States have already done, including my little State of West Virginia--do my colleagues know we were the No. 3 State in the Nation to join in this fairness movement many years ago. And when I was Governor, we worked very hard to work with the other States, and we built up to 24 States that basically were acceptable toward tax code fairness. That is really what it is about. Or a State can meet five mandates. There are five mandates they can meet. They can notify retailers of rate changes, they can create a single organization for collecting sales tax, they can establish a uniform tax base, or they can use destination sourcing for sales tax rates and provide free software and hold harmless protection for retailers.
To simplify, what that means is some States might have different tax codes in different counties. Some counties have different taxes they add on to their State tax or they have a municipal tax, so they are saying there will be 9,600 different tax codes, which is almost impossible. For anyone to participate in this piece of legislation, they have to make a decision on one of those five criteria I just mentioned. That brings the tax code down to 46. It simplifies it. So that argument doesn't hold either, the complication of 9,600 jurisdictions I heard being used by my good friend from New Hampshire.
The beauty is if a State without a sales tax doesn't want to participate, they don't have to. That is the beauty of it. They don't have to. They don't have to participate. They don't have to collect the sales tax from their people, as I said earlier, so they have that option. I know all the arguments against the legislation, but, again, I will say they are just wrong.
Some critics say this is a tax increase. That is wrong. If I am paying 6 percent in West Virginia when I go to a store in Fairmont, Charleston, Huntington, Martinsburg, Greenbrier, or Lewisburg--wherever I go it is the same, 6 percent. The only thing we are saying is if a consumer buys on the Internet, the consumer will be charged the same 6 percent. It is not an increase. It is the same.
I think that makes it pretty simple also. It really does give our little stores, owned by the people who basically are the same people to whom we go to participate, give donations and contributions to the Little League--how many times do we see an Internet company giving to the Little League in our hometown or contributing to the chamber of commerce in our hometown, giving to any of the different fund drives there might be, such as the volunteer fire department. What we are saying is we have to do everything we can to keep them alive and healthy.
Some critics say online services don't use the local services that are paid for by the sales taxes, and they should be required to declare the sales taxes. That is wrong also, and I think we just talked about that. They also say whatever product a customer orders online--let's say it is a book from Amazon or shoes from Macy's or towels from Target--if it was delivered, it still has to get to the customer. It still has to use the infrastructure the State is responsible to invest into, and that is our sales tax.
Sales taxes, in all States that collect them, go into general revenue. General revenue supports a cadre of things--anything we can imagine--from schools to roads to programs people need to supporting senior citizens. The taxes support every aspect of life in the State.
When we look at the whole overall bill, including the fact that the little stores and online retailers sell identical products and use the same infrastructure to deliver those products, and collecting taxes owed on a purchase at the point of sale, whether they are relying on consumers to pay that tax voluntarily, as some critics have proposed, would mean $23 billion that is going uncollected. That is just the fairness we are adding to it. Just the fairness. But $23 billion is needed revenue in States that are having difficult times.
We have heard a lot of people give testimony here today that if their little State gets the amount of money it would get by having a fair, level playing field in their taxes, they could reduce their taxes. Well, that is a good opportunity in these difficult times. If West Virginia could have collected sales tax on out-of-State sales during fiscal year 2012 only--not new taxes, just those already owed to the State--if we took the sales done over the Internet, we could have put $103 million more in our State's budget--$103 million more. Our budget is around $4 billion. That is a good chunk of money.
We could have used it to do a couple of things. Let me give an example of what we could have done. With that extra money from Internet sales, we could have built 412 miles of new roads--412 miles. We could hire 2,000 schoolteachers with that money we didn't receive. We could have built 5 high schools. We could have built 7 middle schools or 10 new elementary schools.
Now, we talk about jobs. We talk about infrastructure. We talk about basically investing back into the State, that is money we weren't able to do that with, and that would have helped us.
When we talk about the e-commerce growth, if we look at the growth of business being done online versus business being done in retail stores, we will see quite a disparity, and it is going to continue to grow and put more pressure on businesses. We think this is not going to interfere with the Internet sales, and the reason we say that is because of our busy lifestyles. If that is the way a person wants to shop, that is fine. But they just would not be able to say, well, I can save money because I don't have to pay the sales tax. It might make somebody think they might go down to John's Hardware Store. I know them, and they do a heck of a job. They have a fighting chance now. I want to stay in my local community. They have a fighting chance now.
Trust me, we would not put any Internet businesses out of business. That will not happen. In 2000, the U.S. economy supported $27 billion in e-commerce, which constituted only 9 percent of all retail sales. Over the next 12 years, e-commerce grew tenfold, totaling $224 billion, which is equal to 7 percent of all retail sales: Seven percent now of all retail sales, 10 years ago, 1 percent. One market analysis
projects that online retail sales in the United States will grow by 10 percent annually through 2017--10 percent annually. So when we look at that, from $224 billion in 2012, that will be over $370 billion in the next 4 years.
I will just told my colleagues in 2012 what our little State lost and what we could have done with it. Think of all the missed opportunities we are going to have not just in my State but in States all over the Nation.
So just look at how the Internet use has soared in the United States since 2000. Some 240 million Americans are online today compared to half that amount when the century began. So a little over 10 years ago we only had about 120 million. We are going to have full integration of our Internet, which is good. I think it is good. I just want to make sure it is fair, that is all, just fair.
As broadband speeds grow, home and mobile Internet mobile users will spend more time online, and that means more time online shopping. That is fine too. They just will not be able to say: I am going to save 6 percent. They can't say that upfront. That means they are going to shop around a little bit more, and that means we have a chance. If I have a little store in Farmington, WV, where I came from, I have a chance to survive. It gives me a chance. I don't start out in the hole. I don't start out with my hands in my pocket and 6 percent behind to begin with.
Google researchers have found that already 97 percent of Americans look for local products online. So, clearly, the businesses back home are at a huge disadvantage in competing with online retailers if tax requirements are unequal. This makes sense. State governments are losing billions of dollars in uncollected sales taxes that could build the infrastructure we all need.
I have heard from so many businesses back home in West Virginia, and I can tell my colleagues there is overwhelming support for this legislation, and there has been from day one, since we became one of the first States to enter into this streamlined compact. That was in 2003. It started with three States, up to 24 States now, and we have a pathway for all the States to have equalization.
``I own a small business that encourages local people to support local West Virginal artists.'' This is what a lady who wrote to me said. She is a small business owner. Her name is Parween Mascari. She says:
I own a small business that encourages people to support local West Virginia artists. Because we sell from a physical storefront, we must collect and remit sales tax from our customers. Online merchants do not currently have to collect or remit a comparable tax on sales they make online. That is not only fundamentally unfair, but seriously impairs our ability to be competitive in the market when we have to charge our customers a tax that they don't have to pay when they shop online.
I wish to commend Senator Durbin and Senator Enzi and my senior Senator Rockefeller for taking leadership on this important issue and for introducing the Marketplace Fairness Act. I am a proud cosponsor of it because I believe it is fair and good for America. I believe this legislation restores fairness and balance to our tax system and strengthens our businesses and revitalizes our downtowns. It creates jobs and helps States struggling to provide the services their citizens expect.
This measure has broad support in both parties, as we have seen by the votes we have already taken. It is backed not only by mom-and-pop stores and Main Street merchants, but also by giant online retailers such as Amazon. I urge Senators to act without any further delay.
I thank my colleagues and, again, I say this is a matter of fairness. It is a matter that I think restores the fairness in American retail.
I yield the floor.
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