Concurrent Resolution on the Budget, Fiscal Year 2014

Floor Speech

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Mr. DURBIN. Madam President, this is a photograph of a store in Palatine, IL, called Soccer Plus. Bob Naughtrip opened this store and sold sporting equipment in the suburbs of Chicago. He had a pretty good business going, but then he ran into something called show-rooming. That consists of people walking into a store and saying: I would like to try on a pair of shoes or some equipment. They would find exactly what they wanted, write down all the information, and then say: Thanks, Bob, walk out the door and order it on the Internet, paying for it without paying sales tax on their purchase. So every time Bob tried to sell something and collect the sales tax in Illinois--which he was required to collect--he was at a disadvantage from the people buying over the Internet. Is that fair?

The Supreme Court said it was up to Congress to decide whether that is fair. It is up to Congress to decide whether Internet sales should be subject to State and local sales taxes. That is why we are here. To my way of thinking, this is just a question of fundamental fairness. We are not talking about imposing a new tax--not at all. We are talking about existing taxes.

In my State of Illinois, incidentally, when I buy something on the Internet, I have a legal obligation to pay sales tax on it, but it is done voluntarily. Many times it is not collected when I make the purchase. I do it on my State income tax return each year. Most people don't do it at all, so the sales tax is never collected on the Internet purchase.

The purpose of this bill is to allow States, if they wish--voluntarily--to start having Internet retailers collect sales tax for the sales that are made over the Internet to people living in their State. This is voluntary, so the States can decide whether to do it. Is this a new tax? No. In 46 States it is an existing tax. It is now going to be collected as opposed to voluntarily adding it to an income tax return by individuals.

So it is not a new tax, and it is certainly not a tax on the Internet itself. It is just that happens to be the point of purchase. We have on the floor my friend, Senator Baucus of Montana. He is from one of the four States in our Nation that do not have a sales tax, and they, of course, are concerned about this issue. Let me make it clear: Anyone purchasing an item on the Internet in Montana is not going to have to pay sales tax if Montana doesn't have a sales tax. The same will be true for New Hampshire, as well as Delaware and Oregon--the four States that have no sales tax. So we are not imposing a new sales tax on Montana or any other State. Those that have the tax will be collecting it under our bill.

How about the Internet retailers who will be covered by this? We created an exemption, as Senator Enzi said. The exemption says they have to have $1 million in sales on the Internet before they have to do this--$1 million.

How many Internet retailers would that mean? We think about 1,000, 975 sell more than $1 million worth of goods each year on the Internet. So about 1,000 retailers on the Internet would be collecting the sales tax. They would look at my home address and they would assess the tax that is owed.

Wait a minute. How will that be assessed when each and every Internet retailer has to go through the burden of establishing this technology, these computer programs? No. The burden is on the States to provide the computer software for the Internet retailers, not at the expense of the Internet retailers. So it is a simple process, and it is a fair process.

Bob was a good businessman. He hired a lot of local people. He collected sales tax and paid his property tax, and with that money they built this road right out in front of his shop, they provided the police and fire services and things that are part of civilization, living in America. He paid the taxes on this, and he lost his business because his competitors weren't collecting the taxes.

I find it interesting, though. I recently made a purchase on Amazon, and they collected the sales tax from me in Illinois--which they can do. Amazon supports our bill, incidentally. They delivered it, and I believe they used the Postal Service this time, but sometimes they use UPS and FedEx. Their trucks and delivery people use the streets of Chicago and the streets of Springfield. They rely on the basic services we all count on. So even the Internet sales are dependent on some basic services that are going to be provided by a community.

I have heard so many speeches on the floor of the Senate about how much we love and venerate and respect small businesspeople. We are told that if this economy is going to get well and move forward, it is going to be driven by small businesses expanding their employment. Well, I believe that. I have seen it over and over again in Illinois and every State I have visited. But if they are going to have a fighting chance to compete, there ought to be a level playing field, as Senator Enzi said. There ought to be a basic fairness here.

If Bob's business had to collect sales tax for sales to Illinois residents, why wouldn't those who purchase over the Internet be under the same obligation? That is what this says. It basically establishes that responsibility.

Now, of course we have a lot of support for this--support from Governors and mayors and business developers and, of course, small businesses. So if people want to come to the floor and decide what side they want to be on, I urge them to be on the side of the same small businesses they have given speeches about over and over again.

I believe in these men and women. Many of them have gone into small business and taken a lot of risks. They are the backbone of our communities, there is no question about it. Time and time again, we go to them to make sure they are going to build the economy and hire the people whom we need in our local communities. So let's give them a fighting chance. The marketplace fairness bill will do that.

Senator Enzi was on this bill before me, Senator Dorgan from North Dakota before me, and when Senator Dorgan retired, I asked if I could join him. But I thank the Senator from Wyoming for his leadership. As you probably heard, Senator Enzi, before he came to the Senate, was a small businessman himself, and so he knows this firsthand.

So let's stand for business and retailers across America and give them a fighting chance. Let them be competitive. Let them continue to hire and be good neighbors in our communities. And let's say to the Internet retailers: We are glad you are doing well, but play by the same rules and make sure there is a level playing field.

Madam President, I yield the floor.

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