U.S. Senator Heidi Heitkamp marked the one-year anniversary of the overwhelmingly bipartisan Senate passage of the Marketplace Fairness Act by calling on the House of Representatives to also pass the bill to level the playing field for Main Street businesses.
During a colloquy on the Senate floor with a bipartisan group of Senators, Heitkamp said that small businesses have been waiting on Congress to act for 22 years, since the Supreme Court decided it's Congress' job to address if states can collect sales taxes from online retailers. In 2012, it was estimated that North Dakota lost about $15 million from the lack of sales tax revenue on remote sales.
Heitkamp has led the charge to provide local North Dakota retailers support against out-of-state internet and catalog retailers. She began working on the issue as North Dakota's Tax Commissioner in the 1990s.
"Since the time I was North Dakota's Tax Commissioner to this day, small business owners have urged me to help them compete on the same playing field as catalog retailers, and now online retailers," said Heitkamp. "One year ago, the Senate rose to the challenge. We still have time to get this done, and a bipartisan majority of us in the Senate stand ready to work with our House colleagues to stand with Main Street. It's long past time for the House to step up to the plate and stand up for small businesses that deserve a fair shot."
The legislation would give states the option to require both brick and mortar and online retailers to collect taxes already owed. It will give those local retailers a chance to compete on a level playing field and allow states and localities to collect much-needed revenue. The Senate passed the measure in May 2013 by a vote of 69-27. Despite support from many Republican and Democratic House members, the legislation has not been considered by the House of Representatives.
The Marketplace Fairness Act has been endorsed by North Dakota Gov. Jack Dalrymple and is also backed by the North Dakota Retail Association, the National Conference of Mayors, the National League of Cities, Eckroth Music, Amazon.com, AutoZone, Barnes and Noble, Best Buy, J.C. Penney Corporation, Petco Animal Supplies, Target and The Home Depot.
In 1991, when Heitkamp was North Dakota's Tax Commissioner, the State of North Dakota attempted to make catalog retailers collect and remit the sales tax the state and municipalities were already owed on sales. The debate went all the way to the Supreme Court, where it was found that the U.S. Congress had the ultimate power to resolve the issue. Since then, the sharp increase in Internet sales has sparked renewed interest from state and local governments in leveling the playing field for brick-and-mortar businesses and closing a gaping loophole in our tax system.
While most consumers are unaware, they are already legally required to pay sales tax on internet purchases. Compliance is very low, but consumers are supposed to fill out their online purchases on a state tax form.