May 6, 2013 CONGRESSIONAL RECORD — SENATE S3079 Generally, retail businesses are re- need to fund schools, and law enforce- does not recognize today’s modern-day quired to collect and remit sales and ment, and other key priorities. method of marketing, this modern-day use taxes on qualifying merchandise or I will vote for this bill, and I urge my way we do business and commerce in services. While most States require colleagues to do the same. our country has not been recognized. consumers to remit use taxes for pur- The PRESIDING OFFICER. The Sen- They continue to struggle, continue to chases from out-of-State vendors, com- ator from Illinois try. I congratulate the Senate. I con- pliance is extraordinarily low as States f gratulate all of the other Senators who cannot legally mandate the collection have pursued this with such vigor and UNANIMOUS CONSENT and remittance of taxes by a business with such hope. I say today is the day AGREEMENT—S. 601 unless the business has a physical pres- that we say yes to America’s small ence in the State. Mr. DURBIN. Mr. President, I ask businesses. This restriction, which was articu- unanimous consent that the cloture I yield the floor. lated in the 1992 Supreme Court case, motion with respect to the motion to The PRESIDING OFFICER. The Sen- Quill Corp. v. North Dakota, went so proceed to Calendar No. 44, S. 601, be ator from Tennessee. far as to invite Congress to address the withdrawn; further, that at 2:15 p.m. on Mr. ALEXANDER. Mr. President, I issue. It is time we do that. Tuesday, May 7, the motion to proceed ask I be notified when I have consumed In an era of unprecedented e-com- to S. 601 be agreed to and the Senate 21⁄2 minutes. merce, Congress’s failure so far to ad- begin consideration of the bill. The PRESIDING OFFICER. The Sen- dress this problem unfairly deprives The PRESIDING OFFICER. Without ator will be notified. State treasuries of much-needed tax objection, it is so ordered. Mr. ALEXANDER. Mr. President, I revenue because Internet-based retail- f congratulate the Senator from North ers are not required to charge MARKETPLACE FAIRNESS ACT Dakota on 20 years of work on this to their out-of-State customers. As you issue, Senator ENZI for 11 years of tire- Mr. DURBIN. Mr. President, in the might imagine, a large number of State less work here, and Senator DURBIN for governments have asked for this legis- closing 10 minutes, the four proponents his effective advocacy. I will make four lation to fix that problem, including who will speak will be first Senator quick points. the current Republican Governor of HEITKAMP of North Dakota, followed by The Senator from Texas said reinvig- Michigan. In fact, Michigan governors Senator ALEXANDER of Tennessee, my- orating the economy should be the No. of both political parties have asked self, and then Senator ENZI of Wyo- 1 priority for Federal and State lead- Congress to pass this important piece ming, who has for 11 years been fight- ers. That is precisely the first sentence of legislation, and I agree with them. ing for this vote. I want him to have of the column of economist Art Laffer The Governor of Michigan says that the last word. in the Wall Street Journal where he passing this law will help the State of The PRESIDING OFFICER. The Sen- says: Michigan collect more than $800 mil- ator from North Dakota. Ms. HEITKAMP. Mr. President, this States can cut their income tax rates if lion over the next 2 years. Those are web vendors collect the sales taxes that are revenues that the State desperately is a day that has been 20 years in the legally due. making. You have heard argument needs. In other words, if you want economic after argument here about how this bill I also think it’s important to keep in growth, vote for the Marketplace Fair- has been rushed, how it is not ready, mind some of the things this bill ness Act. how we have not yet had enough debate doesn’t do. This bill does not authorize No. 2, the idea that this is too com- or deliberation. I tell you on behalf of the States to create State-level finan- plex to do—more than half of the sales the small business owners in my State cial transaction taxes, as some have er- now made on the Internet are by retail- who have told me it is about darn time roneously argued. In fact, the Market- ers that collect the tax when it is sold. we do something, I stand today and place Fairness Act does not create, en- It is a tax that is already owed, so how congratulate this body for taking on dorse, or recommend new Federal, can it be too complex for anybody else this issue and taking a system that has State or local taxes of any kind. to do? It is already being done. So that This bill gives States the option of been grossly unjust and incredibly un- is specious. pursuing collection authority by sim- fair to Main Street businesses in our No. 3, it has been said this should plifying their tax structure, but States country and in our State and said, yes, have gone to committee. It did. It just can also choose to do nothing dif- the Senate will not stand back and never came out of committee because ferently than they do today. The Mar- wait any longer before we give you the chairman, and I say that with great ketplace Fairness Act is about more marketplace fairness. respect, did not want it to. It should equitably collecting taxes that are al- This bill could not be and could not have had amendments. Yes, it should ready owed. have a better name than Marketplace have had amendments. Why didn’t it Over the past decade, many States Fairness. I got involved in this issue as have amendments? Because the oppo- have worked together to develop a a very young person—I like to say that nents to the bill resorted to objecting framework to harmonize sales and use because it was 20 years ago—litigating to every single amendment. tax collection and remittance, known a case before the U.S. Supreme Court. Finally, I say this to my Republican as the Streamlined Sales and I was moved to take that case to the colleagues: This is a conservative bill. I Agreement. Michigan is 1 of the 24 Court by a woman who approached me just mentioned Mr. Laffer. I read this States that currently participate in and said: Look, I am trying to survive. earlier, but I want to read it again. The that agreement. But, in order for the I am trying to participate as a good comments of the chairman of the agreement to be legally enforceable, businessperson in North Dakota, trying American Conservative Union, Al Congress would need to enact legisla- to support my community, trying to do Cardenas: tion granting States the authority to everything right, collect my sales tax, require out-of-State merchants to but I am getting killed in the market- Dear Senators, you continue work next place, because people are sending cata- week on the Marketplace Fairness Act. I remit sales and use taxes. This bill would like to call to your attention what would do that. logs; people come into my store; they conservatives are saying about the issue. I support this effort to simplify and will look at my products. Then they They recognize, as I do, it is not the role of improve sales tax collection, and I am order this stuff through a mail order government to pick winners and losers in the a cosponsor of this bill. This bill will business. Please help me. marketplace by requiring brick and mortar level the playing field between on-line Those pleas have for the last 20 years stores to charge a sales tax while exempting retailers and those with ‘‘brick and gone unheard by this body and by the Internet sales. mortar’’ stores, ensuring that we do House of Representatives. But today He then lists the comments of not give an unfair tax advantage to one we have a chance. We have a chance to favoring the type of retailer over another. This is say to all of those businesspeople idea, Representative PAUL RYAN favor- about ensuring that our States have throughout our country who have been ing the idea, and, of course, as we the ability to collect the taxes they unfairly treated by a tax system that know, William F. Buckley did before he

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Mr. President, thanks delay to pass the Marketplace Fairness Act, But very few people do. About one of every to my colleagues who are on the floor, and the House will follow suit. 100 state taxpayers did when they filed their especially Senator ALEXANDER. Sen- 2010 income taxes, according to a 2012 story [From the Idaho State Journal, May 6, 2013] ator ENZI and I owe the Senator a great by Steven Walters of WisconsinEye, a non- debt of gratitude for his work on this THERE’S A REASON THIS IS CALLED THE profit public affairs channel. MARKETPLACE FAIRNESS ACT Currently, all retailers in Wisconsin col- bill, in helping us craft the bill and (Editorial Board) lect sales tax on purchases and pay that bring the support together. money to the state. If you buy something, The Marketplace Fairness Act making its I ask unanimous consent that the fol- the state and county sales taxes are part of way through Congress is well-named. It what you pay. lowing four editorials be printed in the would allow state governments to force If you purchase something online from a RECORD, from the New York Times, the Internet retailers to collect sales taxes from business that has a physical presence in Wis- Idaho State Journal, the Green Bay their customers and remit the proceeds to consin, you pay sales tax. But if that busi- state and local governments—like, you Press Gazette, and the Northwest Her- ness doesn’t have a store or warehouse in know—brick-and-mortar retailers are re- ald of Illinois. Wisconsin, it doesn’t charge a sales tax. There being no objection, the mate- quired to do. For example, if you went online and pur- The shoppers who buy merchandise off the rial was ordered to be printed in the chased a shirt from Lands’ End, based in Internet are supposed to calculate sales Wisconsin, you’d pay sales tax. If you pur- RECORD, as follows: taxes on their income tax forms, but the fact chased a similar shirt from L.L. Bean, based [From the New York Times, May 1, 2013] is most people don’t do that. So it might be in Maine, you would not. FAIRNESS ON SALES TAXES said that Idahoans pay an extra 6 percent The loophole is courtesy of a 1992 U.S. Su- (Editorial Board) when they buy from stores at home. That’s preme Court decision that exempts compa- money that pays to operate schools and Twenty-one years is a long time to wait. nies from collecting sales tax from pur- other public services, and it’s estimated that chasers who live in a state where the busi- But that is how long local retailers have Idaho would collect about $35 million if waited for Congress to undo a 1992 Supreme ness has no physical presence. Internet sales were taxed. A bill that the Senate is expected to vote Court decision that exempted many online Because some states, like Idaho, have re- on Monday would change that. The Market- retailers, like Amazon.com, from collecting fused to authorize collection of sales taxes place Fairness Act give states the ability to most state sales taxes. The exemption has on online purchases, Congress is acting on require online and mail order retailers to given online sellers a 5 percent to 10 percent behalf of hometown merchants with a federal collect state and local sales tax based on the price advantage over Main Street stores. law. The legislation cleared its first proce- The wait, however, may soon be over. Next address of the purchaser. dural hurdle Thursday on a bipartisan Sen- Wisconsin retailers say this would level week, the Senate is expected to pass the ate vote, 63 to 30. Final Senate passage is Marketplace Fairness Act of 2013, a bipar- the playing field. In a meeting with Press- scheduled for Monday and that tally is likely Gazette Media, area retailers said they don’t tisan bill that would authorize states to re- to be even more strongly in favor, according have a problem competing against other quire out-of-state sellers with more than $1 to The New York Times. Earlier test votes businesses, as long as all play by the same million in sales to collect sales taxes. The won as many as 75 yeses, and House action, rules and all charge a state sales tax. states, in turn, must simplify their sales-tax once seemingly unthinkable, may be codes and give retailers free software to cal- Without that level playing field, area busi- unstoppable. nesses find themselves answering a con- culate the taxes—steps already taken by Tax opponents like Grover Norquist and sumer’s questions and concerns only to have most states. An identical bill in the House have long opposed that consumer order the same item online also has bipartisan support. any legislation that would require collection and not have to pay a sales tax. It reduces Lawmakers have raised the issue for years, of levies on Internet purchases, calling it a local businesses to showrooms. They do all to no avail, and, in the meantime, many tax increase. But Congress is hearing from the work; the online retailer collects the brick-and-mortar stores have gone out of their hometown constituents, and the tide business. The willingness to act now is driv- has turned. Even public officials who signed money. What’s at stake is millions of dollars as en in part by the fact that Amazon, which Norquist’s antitax pledge now are changing well as the fiscal health of the local commu- fought hard to preserve the exemption, re- their minds. Typical is Rep. Scott Rigell, Re- nity. cently gave up the fight. That’s not because publican of Virginia, who calls the strug- The state Department of Revenue esti- the company suddenly developed a belief in gling retailers back home ‘‘the hardworking mates that Wisconsin lost $157 million in sales taxes. Its business model—especially men and women who have mortgaged their revenue because taxes were not collected on homes to buy or rent a little brick-and-mor- its emphasis on same-day delivery—is chang- mail order and other remote sales in 2012— tar shop.’’ Six percent may actually amount ing in ways that would soon cause it to lose $78 million of that from e-commerce sales. the exemption anyway. to their profit margin. Also, the health of area businesses is im- ‘‘I have some concern about the legisla- Main Street needs a level playing field to portant. They pay taxes, provide jobs and do- tion,’’ concedes Rep. Bob Goodlatte of Vir- compete with the exploding online industry. nate to local charitable organizations yet ginia, chairman of the House Judiciary Com- So do large retailers, like Best Buy, that lose sales and money when tax-free pur- mittee, which has jurisdiction on the issue, have cut jobs as shoppers have increasingly chases are made. The out-of-state online- ‘‘but we also recognize the fairness issue— tested electronics at local stores and then only retailers aren’t invested in your com- certain items being taxed in certain cir- gone home to buy them online without pay- munity. ing sales tax. Equally important, states need cumstances, other items being not—is a The bill before the Senate sets a threshold the revenue to help recover from the reces- problem, so we’re going to try to solve that.’’ of $1 million in online sales so small busi- sion. Noncollection of sales tax on online It can be done. nesses will not be hurt and calls for the state Norquist should not complain, though he purchases costs states an estimated $11 bil- to provide free software so businesses can characterizes the bill as a ‘‘money grab by lion a year. Another $11 billion goes uncol- comply. lected on mail-order catalog sales, which cash-poor state and local governments that One aspect of the bill calls for the state to would also be covered under pending bills. would get the power to tax consumers who ‘‘establish a uniform sales tax base for use In the past, most bills that deal with rev- do not have the power to vote them out of of- throughout the state.’’ That concerns us be- enue, no matter how justified, have fallen fice.’’ After all, consumers are already sup- cause many counties, like Brown, have a 0.5 victim to the knee-jerk refusal among many posed to pay sales taxes even if an Internet percent county sales tax. We wouldn’t want Republicans to even talk about taxes, urged merchant does not collect them. to lose out on that money because the state The new law would rectify that, and that’s on by anti-tax groups like Grover Norquist’s must charge a uniform sales tax. And it’s why it is called the Fairness Act. Americans for Tax Reform. But, as reported hard to believe that the software will not be in the Times on Monday, lawmakers from [From the Green Bay Press Gazette, May 5, able to determine the correct state and local both parties have come to see that the argu- 2013] sales taxes. The technology that has given us ment for sales-tax collection is airtight. the ease of should also be CONGRESS MUST LEVEL PLAYING FIELD ON Sales taxes for any state are already le- able to clear that hurdle. gally due on online purchases that would be INTERNET SALES TAXES So far, the bill has bipartisan support in taxable if the items were bought in a local (Editorial Board) the Senate, but faces a much more unclear store. If the retailer does not collect the How many of you have entered a dollar fate in the House. taxes, the buyer is supposed to send them to amount on Line 36 of the Wisconsin income However, Congress needs to pass this bill. the state voluntarily. As a practical matter, tax Form 1? Local businesses are willing to compete as

VerDate Mar 15 2010 02:02 May 07, 2013 Jkt 029060 PO 00000 Frm 00012 Fmt 0624 Sfmt 0634 E:\CR\FM\G06MY6.026 S06MYPT1 smartinez on DSK6TPTVN1PROD with SENATE May 6, 2013 CONGRESSIONAL RECORD — SENATE S3081 long as it’s a fair fight. Also, the bill is not portunity for us to have Republicans communities where they will still be asking for a new tax; it’s asking that the ex- and Democrats together on the floor able to help out some of the charitable isting tax is applied fairly and uniformly and supporting a bill that has the endorse- organizations and activities that would doesn’t put the burden on the consumer to ment of business and labor and local of- have to go by the wayside if this bill reimburse the state. That’s not too much to ask. ficials all across the United States. It were not to pass. is clearly an idea whose time has come. I look forward to working with peo- [From the Northwest Herald, May 2, 2013] I hope we can pass it with a good ple on the House side. I wish to thank WHAT’S FAIR FOR BUSINESS strong vote and encourage our friends Senator DURBIN, Senator ALEXANDER, (Editorial Board) in the House to take it up quickly. and Senator HEITKAMP, particularly, I close by thanking my colleague for all of their efforts on this bill. I The scenario described by Play It Again Sports’ owner Bob Ruer happens all too often from Wyoming. He has been a great thank Senator HEITKAMP for her per- in local businesses. partner in this effort. He came to it be- sistence over 22 years and knowing the A customer comes into his Crystal Lake fore I did. I replaced Senator Dorgan intricacies of how it works on the Ca- store, looks around, maybe tries out the after Senator Dorgan’s retirement and nadian border, as well as having been wares, and then heads home to buy the same tried to keep this moving forward. involved in the original case where the product online. Why? Because Internet re- Today is our day for a vote. I thank Supreme Court challenged us to fix tailers aren’t required to collect sales tax at him for all of his hard work on his side this problem. the buyer’s local rate. of the aisle. Today we have a chance to fix this U.S. Sen. Dick Durbin, D–Ill., is pushing to I yield the floor. problem. I ask my colleagues to vote end that with the Marketplace Fairness Act. We support Durbin’s effort and encourage The PRESIDING OFFICER. The Sen- for the bill. lawmakers in Washington to pass the act. ator from Wyoming. I yield the floor. The legislation would put the initial costs Mr. ENZI. Mr. President, I thank all f of the people who have participated, on the states to provide retailers with the CONCLUSION OF MORNING appropriate software to collect taxes. Inter- particularly Senator DURBIN who has net retailers with less than $1 million in an- helped to coalesce things, Senator BUSINESS nual sales would be granted an exemption. ALEXANDER who came up with the idea The PRESIDING OFFICER. Morning Opponents of the bill, including large on- for having a shorter bill, only 11 business is closed. line retailers such as eBay and Over- pages—never see it in the Senate— f stock.com, have taken issue with the $1 mil- lion exemption and suggested it should be written in plain English, and it is MARKETPLACE FAIRNESS ACT OF bumped higher. States rights. 2013 The bill has the support of big-box stores This does not cause the Federal Gov- such as , Best Buy and Target and ernment to do anything. What it allows The PRESIDING OFFICER. Under online giant Amazon. is for the States to do what they have the previous order, the Senate will re- Beyond the unlevel playing field for busi- already passed laws on. I can see this sume consideration of S. 743, which the nesses, the situation causes the state of Illi- from the standpoint of an individual. I clerk will report. nois to lose out on a great deal of revenue. know in Wyoming if you buy some- The assistant legislative clerk read Now, Illinois taxpayers are on an honor thing on the Internet and you are not as follows: system when it comes to paying state sales A bill (S. 743) to restore States’ sovereign tax for online purchases. Residents are sup- charged a tax, you are supposed to fill out a form and send it in. That is a dif- rights to enforce State and local sales and posed to note the sales tax they owe from use tax laws, and for other purposes. Internet purchases on their state income-tax ficult thing to do, hard to even keep return. Durbin estimates that only 5 percent track of. This will eliminate that prob- Pending: of Illinois taxpayers do so. Gov. Pat Quinn lem of individuals wanting to pay the Reid (for Enzi) amendment No. 741, of a said the state stands to collect an additional tax but not knowing exactly how to do perfecting nature. $200 million annually in sales-tax revenue if Durbin amendment No. 745 (to amendment it. No. 741), to change the enactment date. the bill passed. I know it from the standpoint of a This is not a tax increase. It’s not a new The PRESIDING OFFICER. Under small businessman, if they had the ex- tax. These sales taxes and tax rates are al- the previous order, all postcloture time perience of somebody coming in, trying ready in place. is considered expired. This is a needed law to level the playing on the goods, finding out exactly what Under the previous order, amend- field for local businesses who’ve been good they want, the color, the style, the ment No. 745 is withdrawn. corporate citizens, hired local employees and feel, everything, and then ordering it The question is on agreeing to paid property taxes that support local on the Internet. The even more ironic schools and other taxing districts. amendment No. 741, offered by the Sen- part of it is when they have a problem ator from Nevada, Mr. REID. Mr. DURBIN. Mr. President, what is with it, they bring it back to the local Mr. ALEXANDER. Mr. President, I happening with Internet sales? They retailer to fix it. ask for the yeas and nays. are growing dramatically. Listen to I have seen it from the standpoint of The PRESIDING OFFICER. Is there a these numbers. In 2012 online sales ac- a mayor. I know in Wyoming at least sufficient second? counted for $225 billion in sales in 30 percent and up to 70 percent of the There appears to be a sufficient sec- America. In the next 5 years it will revenue of the municipalities comes ond. double to $435 billion. It is an endeavor from the sales tax. That is on a declin- The clerk will call the roll. that has become part of our lives. What ing basis at the moment. That is not The assistant legislative clerk called we are asking in this bill is that those only what they run the city’s streets the roll. selling on the Internet be treated the and snow removal on; a lot of the po- Mr. DURBIN. I announce that the same as those selling on the corners of lice, the fire protection, even education Senator from New Jersey (Mr. LAUTEN- our streets, to make sure the brick- is affected by the sales tax. BERG) and the Senator from Alaska and-mortar businesses have a level I have seen it from the standpoint of (Mr. BEGICH) are necessarily absent. playing field. That is all we are asking. a legislator as well. I know when we Mr. THUNE. The following Senators This bill contains no new Federal passed those taxes, we did not say: are necessarily absent: the Senator tax, no new State and local tax. What Okay, we want to discriminate against from North Carolina (Mr. BURR), the it does is collect taxes already owed. It the local business that pays the prop- Senator from Texas (Mr. CORNYN), the simplifies the system by saying there erty tax, hires people locally, and par- Senator from South Carolina (Mr. GRA- will only be one taxing entity that ticipates in all the community stuff. If HAM), and the Senator from Kansas identifies the taxes to be charged in you are out of State, we are going to (Mr. MORAN). every single State, one audit from each let you off the hook. Further, if present and voting, the State. It tries to provide for the retail- No legislator ever passed a bill like Senator from Texas (Mr. CORNYN) ers the basic software they need to get that. This is one that corrects all of would have voted ‘‘nay.’’ the job done. those things and brings fairness to the The PRESIDING OFFICER (Mr. DON- This is a fascinating bill. For those marketplace. I think it will make a NELLY). Are there any other Senators who follow the Senate, it is a rare op- significant difference, particularly in in the Chamber desiring to vote?

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