Marketplace Fairness Act

Floor Speech

Mr. ENZI. Madam President, the Marketplace Fairness Act is about States' rights and giving States the right to decide to collect or not collect taxes that are already owed. Critics have claimed that we are creating a new Internet sales tax, that businesses would have to remit sales taxes to 9,600 different tax jurisdictions, and that today's software simply isn't capable of helping businesses collect sales tax.

Nothing could be farther from the truth. On the issue of creating a new tax or imposing new taxes, we made it clear in section 3(d) of the legislation that nothing in the bill encourages a State to impose sales and use taxes on any goods or services not subject to taxation prior to the date of enactment. This includes imposing sales and use taxes on financial transactions or services and any other good or service that a State may be considering.

We also made it clear that nothing in this legislation limits the existing authority of States to impose State and local sales and use tax on and collect such taxes directly from the purchaser. 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.

I would like to ask my friend Senator Alexander to help me respond to some of these concerns because he has been vocal about States' rights and that this has nothing to do with taxing the Internet.

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Mr. ENZI. Yes, we were deliberate by including language in the Marketplace Fairness Act to authorize States to require remote sellers to collect taxes that are already owed under current law. It was not our intention to urge States and localities to impose other taxes not associated with sales and use taxes.

Another issue that my colleagues and I want to make clear is the reason we included language in the perfecting amendment recognizing tribal sovereignty. Tribes that have adopted sales taxes have the same concerns as States about the collection of taxes on remote sales. During the drafting and consideration of this legislative concept in 2005, Senator Byron Dorgan of North Dakota and I began working with the National Congress for American Indians and the National Governors' Association to find common ground to allow tribal governments the opportunity to participate in the Streamlined Sales and Use Tax Agreement, SSUTA. After 2 years of deliberation, tribal government legislative language was included in the Main Street Fairness Act bill introduction in 2007.

Although not included in the introduced version of the Marketplace Fairness Act this year, tribal governments requested the ability to collect sales and use tax if they choose to participate in the alternative system, not the SSUTA. Those tribal governments who participate in a streamlined system would agree to the same rules as the States who participate in that system. At this time, the Senate bill includes tribal governments in the "State'' definition. Although some may disagree, I do encourage my House colleagues working on the Marketplace Fairness Act to further review this specific policy issue when the bill is debated in the U.S. House of Representatives.

This is a very important issue that Senator Heitkamp has experience with, and I would ask her to share her comments with our colleagues. I also want to say yet again how grateful, and lucky, we are to be working with Senator Heitkamp on this issue. She has been working to solve this problem for even longer than I have, and I want to ask her for her thoughts on the legislation.

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