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Public Statements

Marketplace Fairness Act

Floor Speech

Location: Washington, DC


Mr. ENZI. I thank the Senator from Illinois, Mr. Durbin, for his interest and participation in this issue, his ability to explain it, and for the way he has brought a lot of people along in helping out with this bill. He has been a great replacement, and we have made more progress than we ever have in the other 14 years of working on the bill. So I thank him for that and for his ability to explain things so clearly.

I also want to thank Senator Lamar Alexander who helped us change this bill in the last year from about an 80-page bill to an 11-page bill and made it States rights. As Senator Durbin so eloquently explained, this takes action by the States. This is just to clear up the Quill case that made it a little confusing about whether they could charge a tax and then challenged Congress to fix the problem.

The solution Senator Alexander came up with condensed the bill considerably and made it a lot easier. But it made it a States rights issue so that the States have to take some action.

I thank Senator Heitkamp as well. She is brandnew to the bill but has more years of experience than anybody because she was a part of the Quill case when it came up. She was representing North Dakota in that case, and that is the other side of the case. She can explain the intricacies of that and the challenge we were given, and the number of reasons why it didn't happen earlier.

One of the reasons is that 20 years ago the Internet was in its infancy and nobody knew what its capabilities were going to be. Most people didn't even know it was out there. That has changed over quite a period of time to where it is now one of the handy tools everybody uses. We have come to recognize there are apps that are available that will answer any question and sources of information that will provide us with what we need to know on virtually any subject. I think that has probably put some encyclopedias out of business, but it has made information more readily available, and it has made products available that people didn't have the availability of before. But it is creating a bit of a dilemma that marketplace fairness straightens out.

Today we are scheduled to vote on the motion to proceed to the bill at 5:30, and I do strongly encourage my colleagues to vote yes. Let me explain why.

As Senator Durbin said, I have been working on this sales tax fairness issue since joining the Senate in 1997, and I may have a unique perspective on the dozens of proposals that have been introduced. For instance, I have worked sales tax from a number of different aspects. I worked the sales tax issue when I was in the Wyoming Legislature. I know when our legislators were considering sales tax they didn't intend to discriminate against the people in the communities, those who hire the people in the communities and pay the property tax to the communities and participate in all of the community events. They definitely didn't anticipate they were going to be the source where people could come in and feel and touch and try on the product and then check the bar code with their cell phone--one of the advances made possible now through Internet use--and then find out if there is a lower price, which is usually based on no sales tax.

I am pleased some businesses across the Nation have said that isn't fair and have decided to voluntarily do the sales tax. And there is no problem with them doing that.

I have also been a retailer, so I know that feeling. My wife and I had a shoe store, so I know the feeling, again, the Senator from Illinois described, of people coming in, trying it on, feeling it, making sure it is the right size and then checking to see where else it is available. It is discouraging when the sales tax is the difference. So as a former small business owner, I believe it is important to level that playing field for all retailers--the in-store, the catalogue, and the online--so an outdated rule for sales tax collection doesn't adversely impact particularly small businesses and Main Street retailers.

I know a lot of year books would never be published if it wasn't for the support of some of the local businesses. Thousands of these local businesses are forced to do business at a competitive disadvantage because they have to collect a sales tax or a use tax and remote sellers don't. In some States that can mean a 5- to 10-percent price disadvantage. We should not be subsidizing some taxpayers at the expense of others. All businesses and their retail sales should be treated equally.

As a former mayor, I know sales taxes go to State and local governments to bring in needed revenue for maintaining schools, fixing our roads, supporting law enforcement, fire protection, those first responders we are always so conscious of, particularly today and through this last week. If Congress fails to authorize States to collect tax on remote sales, and electronic commerce continues to grow, we are implicitly blessing a situation where States will be forced to raise other taxes, such as income and property taxes, to offset the growing loss of sales tax revenue.

Do we want that to happen? I don't think so. We need to promote economic growth, not stifle it.

As the Supreme Court identified in the Quill v. North Dakota decision in 1992, the Quill decision challenged Congress to come up with a better system, a way of making it fair. The local brick-and-mortar retailers collect sales taxes, while many online and catalog retailers are exempt from collecting the same tax as a result of that case, and that was based on whether they had a nexus. The nexus has changed dramatically since that time. That used to be where you would go and actually pick up something, but now it is where you can order something and that can be even moved around the country virtually at will. So we designated some States as not having to do it. Web sites could be set up in that State for people to sell through from anywhere.

So the taxes need to be collected. It needs to be fair, and right now it is not only fundamentally unfair to Main Street retailers, but it is costing States and localities billions in lost revenue. The Supreme Court invited Congress to address this issue, and we stalled. We know that early on the Internet was new, but now everything is done on the Internet. So now is the time for Congress to act.

Many Americans don't realize that when they buy something online or order something from the catalog of a business outside their own State, they still owe the sales tax. I know from being a legislator that was part of what we put in place. There is a form in Wyoming that you can fill out and pay your tax. It is pretty hard to keep track of, particularly on smaller items, but it ought to be easier on big items. And I do know there are about three people who comply with that.

For over a decade Congress has been debating how to best allow States to collect sales tax from the online retailers in a way that puts Main Street businesses on a level playing field with the online retailers. So on February 14, 2013, the bicameral--House and Senate--and bipartisan--Republicans and Democrats--put together the Marketplace Fairness Act that was introduced to close that 20-year loophole that distorts the American marketplace by picking winners and losers, by subsidizing some businesses at the expense of other businesses and subsidizing some taxpayers at the expense of other taxpayers. All businesses in retail sales and all consumers and their purchases should be treated equally.

The bill also empowers States to make the decision themselves. This is not Congress saying what has to be done or whether they collect them. If they choose to collect already existing sales taxes on all online purchases regardless of whether the sale was online or in-store, States will be able to if this bill passes. If they want to keep things the way they are, that is the State's choice. That is why this bill is the States rights bill.

The Marketplace Fairness Act does not tax Internet use, it does not tax Internet services, and it does not raise taxes. It gives States the right to collect what is owed by the purchasing individuals. Some argue that the bill is a disguise to create taxes. It is not. Consumers are already supposed to pay taxes and use taxes in most States for purchases made over the phone, by mail, or by way of the Internet.

Mr. President, in a couple of minutes we are going to have a moment of silence for the tragic events that happened. I yield the floor for the time to be able to do that.


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