Small Business Jobs and Tax Relief Act--Motion to Proceed

Floor Speech

BREAK IN TRANSCRIPT

Mr. DURBIN. Mr. President, I thank Senator Alexander of Tennessee and Senator Enzi of Wyoming, cosponsors of this measure and participants in this colloquy on the floor today. I am sorry I wasn't here at the outset, but I am grateful for their participation and comments they have made, and especially for their commitment to this cause.

I think Senator Enzi--and I would give special thanks to Senator Alexander, who stepped in at a very important moment and helped us craft a part of this bill--helped us craft an agreement on this bill and brought some new approaches to it which have been extremely helpful.

The notion of offering this as an amendment is a show of good faith on our part and a show of commitment to the seriousness and the importance of this issue. The fact that many Democrats and Republicans can join together in this bipartisan manner is an indication that this bill cuts across party lines. I think it gets down to a basic issue, as it says, of fairness.

The economy is clearly getting better. There are better days ahead; jobs are being created and our economy is growing stronger. There may be times when the job numbers are disappointing and the stock market stumbles, and we continue to face challenges in Europe and other places, but we are improving.

Businesses in Illinois and across the country are starting to see customers come back. Small retailers in my home State of Illinois are pushing the slogan ``buy local'' in their effort to urge consumers to come back to local stores, farmers markets, and shoe stores, instead of buying online. These efforts support local brick-and-mortar sellers who contribute to the community in so many different ways. They sponsor the local baseball teams, they collect sales and use taxes that pay for services such as fire, police, and trash collection, and they provide good-paying local jobs.

While these efforts have been successful, many local retailers share with me how frustrating it is to lose business because online retailers have a built-in advantage that I have seen firsthand. While local Main Street businesses collect State and local taxes and use taxes, their online competitors don't. In Illinois, this can mean an 8-percent differential in price. This encourages customers to buy everything from electronics to books online to avoid paying sales tax and use taxes.

A couple examples:

Bob Naughtrip, owner of Soccer Plus in Palatine and Libertyville, IL, describes how his biggest online competitor can offer a discount of more than $10,000 because it doesn't have to collect sales and use taxes. Bob sells sporting equipment to local sports clubs, and it is not unusual for these clubs to make purchases that exceed $100,000 a year. He can't compete when the competition has a $10,000 price advantage, so he loses the business.

Matt Lamsargis, owner of the Springfield Running Center--a person I have come to know--and Bob Thompson, owner of BikeTek, both in my hometown of Springfield, told me when I visited their small businesses last year they are victims of ``showrooming,'' they call it. They lose business when customers walk into the store, look around, maybe even try on the clothing and shoes or even get fitted just right, write down a few numbers, then walk out the door and order the product over the Internet at a discount, because the Internet seller doesn't collect sales tax and these local retailers have to. Ironically, some of the customers, dissatisfied with their online purchases, come back to the same store to complain about a product they didn't even buy there. So we have got to find a way to make this a fairer marketplace.

Why can't State and local governments require online retailers to collect sales and use taxes? For 20 years, State and local governments have been prohibited from enforcing their own sales and use tax laws because of a Supreme Court decision in Quill v. North Dakota where the Court clearly stated that only Congress has the authority to solve this problem.

Last year, Senator Enzi, Senator Alexander, and I introduced the Marketplace Fairness Act with additional cosponsors. We now have 13 bipartisan sponsors. This bipartisan group of Senators understands that to truly help small businesses grow and create jobs, we need to make sure they compete on a level playing field. The Marketplace Fairness Act would do that. That is why it is being filed as an amendment to the Small Business Jobs and Tax Relief Act.

Our amendment is about saving Main Street businesses and the jobs provided by those businesses. This bill does not mandate the States but it allows States, if they choose, to require online and brick-and-mortar retailers to play by the same sales tax rules. The bill eliminates the built-in price advantage that has distorted the market for 20 years.

It includes, as Senator Enzi recently said, a small seller exemption for those selling less than $500,000 worth of commodities a year. If Grandma Bennet's apple butter is being cased up and sold to the tune of $10,000 or $20,000 a year online because her smart grandson has given her advice on how she can retail this online, she doesn't have to start collecting sales tax until she has sold $500,000 worth of goods; in the next year, she collects sales tax. So we are trying to be sensitive to smaller businesses and, as Senator Enzi said, startup businesses.

This bill includes 240 organizations. I ask unanimous consent that the list of those organizations be printed in the Record after my remarks.

The PRESIDING OFFICER. Without objection, it is so ordered.

(See exhibit 1.)

Mr. DURBIN. This is an issue where the International Association of Firefighters and AFSCME stand together with the National Retail Federation, the Retail Industry Leaders Association, and the Consumer Electronics Association. What an amazing coalition.

Amazon.com, the largest retailer online in America, supports our bill. Yet the largest online retailer, in supporting this bill, still has Members of the Senate questioning whether they are going to react positively. They are on record in favor of this.

It is also supported by groups such as the U.S. Conference of Mayors, the National Association of Counties, and the National Council of State Legislators. The National Governors Association supports the Marketplace Fairness Act, because these State and local governments are losing about $23 billion a year on uncollected sales tax. In Illinois, we are losing about $1 billion a year, about 15 percent of our current deficit. It would make a difference if we could collect this. Again, the States would have to make that decision. We don't force it on them.

This has the support of eight Democratic Governors and 13 Republican Governors, including Governor Quinn of Illinois, O'Malley of Maryland, McDonnell of Virginia, Mitch Daniels of Indiana, and Haley from the State of South Carolina. Recently, Governor Chris Christie from the State of New Jersey publicly came out in support and said:

I too--along with Governors like Governor Daniels and others--urge the federal government and Congress in particular to get behind ..... legislation to allow states to be able to make these choices for themselves. .....

Governor LePage, a Republican Governor from the State of Maine, wrote a letter of support saying, ``The Marketplace Fairness Act does not raise taxes.'' The point he makes and the argument here is this is not a new tax.

So if this bill has such broad bipartisan support, why haven't we passed it? Well, we need 60 Senators. The majority leader has said to me and Senator Enzi, ``Show me the votes.'' And that is what we are trying to do--bring together a bipartisan group that will support this, that understands it is simple fairness for small businesses that create jobs and opportunities all across America. And with the sales taxes they collect, they provide for local police and firemen, for the sewers and streets, and the things in life that we come to take for granted in our cities across America. We want to make sure the online retailers are making the same contribution.

So I urge my colleagues, when this amendment comes before them, to support it on a bipartisan basis.

Mr. President, I yield the floor.

BREAK IN TRANSCRIPT

Source