S. HRG. 112–831 MARKETPLACE FAIRNESS: LEVELING THE PLAYING FIELD FOR SMALL BUSINESS HEARING BEFORE THE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION UNITED STATES SENATE ONE HUNDRED TWELFTH CONGRESS SECOND SESSION AUGUST 1, 2012 Printed for the use of the Committee on Commerce, Science, and Transportation ( U.S. GOVERNMENT PRINTING OFFICE 85–318 PDF WASHINGTON : 2013 For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001 VerDate Nov 24 2008 13:39 Nov 01, 2013 Jkt 075679 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 S:\GPO\DOCS\85318.TXT JACKIE SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION ONE HUNDRED TWELFTH CONGRESS SECOND SESSION JOHN D. ROCKEFELLER IV, West Virginia, Chairman DANIEL K. INOUYE, Hawaii KAY BAILEY HUTCHISON, Texas, Ranking JOHN F. KERRY, Massachusetts OLYMPIA J. SNOWE, Maine BARBARA BOXER, California JIM DEMINT, South Carolina BILL NELSON, Florida JOHN THUNE, South Dakota MARIA CANTWELL, Washington ROGER F. WICKER, Mississippi FRANK R. LAUTENBERG, New Jersey JOHNNY ISAKSON, Georgia MARK PRYOR, Arkansas ROY BLUNT, Missouri CLAIRE MCCASKILL, Missouri JOHN BOOZMAN, Arkansas AMY KLOBUCHAR, Minnesota PATRICK J. TOOMEY, Pennsylvania TOM UDALL, New Mexico MARCO RUBIO, Florida MARK WARNER, Virginia KELLY AYOTTE, New Hampshire MARK BEGICH, Alaska DEAN HELLER, Nevada ELLEN L. DONESKI, Staff Director JAMES REID, Deputy Staff Director JOHN WILLIAMS, General Counsel RICHARD M. RUSSELL, Republican Staff Director DAVID QUINALTY, Republican Deputy Staff Director REBECCA SEIDEL, Republican General Counsel and Chief Investigator (II) VerDate Nov 24 2008 13:39 Nov 01, 2013 Jkt 075679 PO 00000 Frm 00002 Fmt 5904 Sfmt 5904 S:\GPO\DOCS\85318.TXT JACKIE C O N T E N T S Page Hearing held on August 1, 2012 ............................................................................. 1 Statement of Senator Rockefeller ........................................................................... 1 Statement of Senator Ayotte ................................................................................... 3 Letter dated July 30, 2012 to Hon. Kelly Ayotte from Joe Cortese, Owner, NobleSpirit .................................................................................................... 4 Statement of Senator Wicker .................................................................................. 11 Statement of Senator Hutchison ............................................................................ 36 Prepared statement .......................................................................................... 36 Statement of Senator Klobuchar ............................................................................ 40 Letter dated July 31, 2012 to Hon. Any Klobuchar from Mark Dayton, Governor, State of Minnesota ...................................................................... 40 Statement of Senator DeMint ................................................................................. 46 Statement of Senator Pryor .................................................................................... 49 Statement of Senator Boozman .............................................................................. 50 Statement of Senator Begich .................................................................................. 52 Statement of Senator Blunt .................................................................................... 54 Prepared statement .......................................................................................... 54 WITNESSES Hon. Michael B. Enzi, U.S. Senator from Wyoming ............................................. 5 Hon. Richard J. Durbin, U.S. Senator from Illinois ............................................. 7 Hon. Lamar Alexander, U.S. Senator from Tennessee ......................................... 9 Prepared statement .......................................................................................... Paul Misener, Vice President for Global Public Policy, Amazon.com .................. 12 Prepared statement .......................................................................................... 13 Steven Bercu, CEO and Co-Owner, BookPeople ................................................... 15 Prepared statement .......................................................................................... 16 Scott Peterson, Executive Director, Streamlined Sales Tax Governing Board ... 19 Prepared statement .......................................................................................... 20 Steve DelBianco, Executive Director, NetChoice Coalition .................................. 22 Prepared statement .......................................................................................... 24 APPENDIX Hamilton Davison, President and Executive Director, American Catalog Mail- ers Association, prepared statement .................................................................. 59 Jerry Cerasale, Senior Vice President, Government Affairs, Direct Marketing Association, Inc., prepared statement ................................................................ 68 Bill McClellan, Vice President, Government Affairs, Electronic Retailing Asso- ciation, prepared statement ................................................................................ 71 Andrew Moylan, Vice President, Government Affairs, National Taxpayers Union, prepared statement ................................................................................. 74 Letters of support from Republican Governors Haslam (TN), Daniels (IN), LePage (ME), Bentley (AL), Snyder (MI), Daugaard (SD), and Corbett (PA) . 77 David French, Senior Vice President, Government Relations, National Retail Federation, prepared statement .......................................................................... 85 Harold A. Schaitberger, General President, International Association of Fire Fighters, prepared statement .............................................................................. 88 National Governors Association, prepared statement .......................................... 89 (III) VerDate Nov 24 2008 13:39 Nov 01, 2013 Jkt 075679 PO 00000 Frm 00003 Fmt 5904 Sfmt 5904 S:\GPO\DOCS\85318.TXT JACKIE IV Page Letter dated July 24, 2012 to Hon. John Boehner, Hon. Nany Pelosi, Hon. Harry Reid, and Hon. Mitch McConnell from Robert Bentley, Governor of Alabama; Dennis Daugaard, Governor of South Dakota; Paul LePage, Governor of Maine; Tom Corbett, Governor of Pennsylvania; Mitch Daniels, Governor of Indiana; Bill Haslam, Governor of Tennessee; and Rick Snyder, Governor of Michigan .......................................................................................... 91 Federation of Tax Administrators, prepared statement ....................................... 91 Letter dated July 31, 2012 to Hon. John D. Rockefeller IV and Hon. Kay Bailey Hutchison from Donald J. Borut, Executive Director, National League of Cities .................................................................................................... 92 Letter dated July 31, 2012 to Hon. John D. Rockefeller IV and Hon. Kay Bailey Hutchison from Bill Hughes, Senior Vice President, Government Affairs, Retail Industry Leaders Association ..................................................... 93 Letter to Hon. John D. Rockefeller IV from David Broyles, Chairman, West Virginia Retailers Association and Owner, Calvin Broyles Jewelers .............. 94 Joseph Henchman, Vice President, Legal & State Projects, Tax Foundation, prepared statement .............................................................................................. 95 Letter dated August 1, 2012 to Senator Jay Rockefeller and Senator Kay Bailey Hutchison from State Senator Jay Emler, Kansas, CSG Chairman and Governor Luis Fortun˜ o, Puerto Rico, CSG President ................................ 102 Letter dated August 1, 2012 to Hon. John D. Rockefeller IV and Hon. Kay Bailey Hutchison from American Federation of Labor and Congress of lndustrial Organizations (AFL–CIO); American Federation of State, County and Municipal Employees (AFSCME); American Federation of Teachers (AFT); Department for Professional Employees, AFL–CIO (OPE); Inter- national Association of Fire Fighters (IAFF); International Federation of Professional and Technical Engineers (IFPTE); National Education Associa- tion (NEA); Service Employees International Union (SEIU); The Inter- national Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW) ................................................................................. 103 Letter dated August 1, 2012 to Hon. John D. Rockefeller IV and Hon. Kay Bailey Hutchison from Mark E. Nebergall, President, Software Finance & Tax Executives Council ................................................................................... 104 Senator Pamela Althoff, Illinois; Delegate Sheila Hixson, Maryland; and Sen- ator Curt Bramble, Utah; Executive Committee Task Force on State and Local Taxation, National Conference of State Legislatures, prepared state- ment ...................................................................................................................... 106 National Association of Chain Drug Stores, prepared statement ........................ 108 R. David L. Campbell, Chief Executive Officer and Joan Wagnon, Executive Vice President, The Federal