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Marketplace Fairness Act of 2013 -- Motion to Proceed

Floor Speech

Location: Washington, DC


Mr. ENZI. Mr. President, I thank the Senator from Tennessee, Mr. Alexander, and the Senator from Illinois, Mr. Durbin, for this discussion they have had where I think they cleared up a lot of the confusion there might be over the bill. They have presented excellent reasons why we need to get this bill done, and why we need to get it done now--so we can continue to grow businesses in our States instead of growing businesses outside of our States.

There are a number of things people have mentioned. One of the big ones I want to talk about is the small seller exemption. I know Senator Wyden from Oregon has suggested a compromise for the whole bill which was to create the nontax States to be a haven for all Internet sales, and that won't work. Our purpose is not to move all of the business online out of our own States but to keep it there.

But there is a compromise in this bill. It is called the small seller exemption, and that is where people who are starting in business don't have to collect the tax when they are out of State. With in-State sales, a lot of them will have retail sales in their State as well as hopefully some online sales. On what they sell in their bricks-and-mortar store, they collect sales tax from everybody who buys from them. There is no exemption. But the compromise we made for the online sales was until a retailer hits the $1 million mark in a year--and we would love for them to hit the $1 million mark and have that kind of business. But until they do, they are protected in that they don't have to collect the tax. We give them a break over the in-State retailers. Of course, the ones who are in State who are selling out of State have that same online break. But that is why we have a small seller exemption, to continue to grow small businesses that are using the Internet. We want the Internet to grow and are not discriminating against the Internet. And as has been mentioned, there will be no tax on the use of the Internet. That is not a part of this bill.

This is a tax on what people buy on the Internet, because States already anticipate that the sales tax they have in place is going to be paid on every purchase. When that money comes back, part usually goes to the State, part goes to the county, part goes to the towns. That is to provide for their schools, fire protection, for all of the services people who live in the communities are used to. I can tell you that in Wyoming that makes up at least 30 percent of everybody's budget. I know in one town it is 70 percent of their budget.

So if you start eliminating the sales tax by getting products from out of State, you are wiping out services in the local communities. Those local communities are where the Main Street retailers, the shopping center retailers--the brick-and-mortar retailers--are the ones paying property tax. They are hiring local people, and they are also participating in the community in a number of ways. School yearbooks probably wouldn't exist without the participation of the local merchants.

We want to continue to encourage the local merchants, and so we came up with the small seller exemption of $1 million. You don't start collecting the tax and you don't need to get the free software to be able to collect the tax until you hit the $1 million mark in a year, and then that would go into effect.

We looked into a number of different levels. Our older bill had 1/2 million in the Senate bill and the House had $1 million in their bill. I said, Let's give a little more flexibility. Let's go with the $1 million. So that is how we wound up with $1 million.

I will comment more on this later, but I see my fellow Senator is here who would probably like to make a comment.

I yield the floor and reserve the remainder of my time.


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