Mr. ENZI. To return to the discussion on marketplace fairness, I mentioned that most consumers are aware they are supposed to pay the tax on purchases that the retailer does not choose to collect at the time of the purchase, so I would like to provide some highlights of what the Marketplace Fairness Act actually accomplishes.
The bill gives the States the right to decide to collect or not collect taxes that are already owed. The legislation would simplify and streamline the country's more than 9,000 diverse State tax jurisdictions and provide 2 options by which States could begin collecting sales taxes from online and catalog purchases.
The bill also carves out small businesses so that they won't be adversely affected by the new law by exempting businesses with less than $1 million in online or out-of-State sales from the collection requirements until they have had a year in which they have had more than $1 million worth of sales. This small business exemption will protect small merchants and give new businesses time to get started. As has been mentioned, when they meet that level, then they have to be provided with a program that will do the calculations for them, provide for submitting the revenues, and also hold them harmless for any errors there might be in the program.
So don't let the critics get away with saying this type of simplification can't be done. The different tax rates and jurisdictions are no problem for today's software programs. When you order something online, you have to put in your ZIP Code. The ZIP Code will tell what the tax is from whatever jurisdiction.
As a former mayor and State legislator, I strongly favor allowing States the authority to require sales and use tax collection from retailers on all sales for each State that chooses to do so. We need to implement a plan that will allow States to collect revenue using mechanisms already approved by their local leaders. We need to allow States the ability to collect the sales taxes they already require.
If enacted, it would provide approximately $23 billion in fiscal relief for States for which Congress does not have to find an offset. This will give States less of an excuse to come knocking at the Federal door for handouts and will reduce the problem of federally attached strings.
A lot of people don't realize that the Federal Government is out of money, and that is shown by what was done through the sequester because the Federal Government usually pays property tax to States and localities that have Federal property. That amount has never been equal to what other people would be paying in their property taxes, but it has been a show of good faith that they recognize that with the government there, there is a loss of revenue and that the Federal Government should do something. So there is a tax level they have been paying. It hasn't gone up much and it hasn't gone down much until this year. Then, as part of the sequester, they decided they would hold 5.3 percent from all the States and all the local governments. That is called payment in lieu of taxes, and that is one way the States and the counties have lost money and a way they are going to have to make up for it if that continues. But there is also the possibility that the revenue they take in from this can reduce something like property taxes.
For many years I have worked with all the interested parties to find a mutually agreeable legislative package to introduce and ultimately enact into public law. This year Senators DURBIN, ALEXANDER, HEITKAMP, and I worked together with 25 of our bipartisan Senate colleagues to produce a bill that assists sellers and State and local governments to simplify taxes and use collection and administration. We are working with our House supporters--Representatives Steve Womack, Jackie Speier, Peter Welch, and John Conyers--and have found common ground on this important issue to move forward with a bipartisan, bicameral bill in this Congress. I wish to publicly commend all of my Senate and House colleagues in taking a leadership role and working on this important issue.
The Marketplace Fairness Act is about States rights, and it is about fairness on the budget bill. We had a vote on this, and I was very pleased that 75 of the 100 Senators voted in favor of making the marketplace fair. So I strongly encourage my colleagues to vote for the motion to proceed on S. 743, the Marketplace Fairness Act, tonight at 5:30 when we have that vote. I am hoping we will be able to duplicate what we did before and support the goals of States rights and a level playing field for all businesses.
I yield the floor, and I suggest the absence of a quorum.
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