Marketplace Fairness Act

Floor Speech

I am here on the floor today just to say a few words to follow the distinguished chairman of the Commerce Committee in support of the Marketplace Fairness Act.

I represent Rhode Island and I have to say my Governor, a former member of this body, Lincoln Chafee; the president of our State senate, Senator Teresa Paiva; our speaker of the house, Gordon Fox, and numerous other Rhode Island organizations have ardently urged us to pass this legislation. The reason for that is twofold. No. 1, they are losing immense amounts of tax revenue that is swirling down this loophole of noncollection. Actually, the number I think is $23 billion for 2012. Rhode Island is not the biggest State, so we don't have a huge chunk of it, but it is about $70 million for Rhode Island, which is pretty significant.

So it is important to all of us, while the States are struggling, to make sure tax revenue that is due and just not being collected is put into the revenue equation.

The second thing is that it really just plain is not fair to the local businesses that have shops on Main Street, that have shops in the local shopping malls, to have competition with electronic delivery companies, with companies that exist on the Internet and with Internet shopping, that are subsidized, in effect, by the government.

Very often my colleagues come to the floor to say government should not pick winners and losers. Government should not pick winners and losers--how many times have we heard that? If I had a nickel for every time somebody on the other side of the house said government should not pick winners and losers, I would probably be a wealthy man. But ``government should not pick winners and losers'' is a principle that really applies in this area because those companies that are operating a brick-and-mortar storefront are paying their taxes--they are paying their taxes--and the noncollection on the Internet sales puts them at an unfair disadvantage.

There are conveniences to Internet sales. Nobody wants to get rid of that. It is an important, growing part of our economy. I am all for that. In fact, I think I have family members who shop that way, including a daughter who is one of the more ardent eBay shoppers in the country, I suspect. But in any event, it is very important that we not add to the natural advantages Internet shopping has by creating this additional, manufactured tax advantage.

It comes down to a point that I think you could appreciate if you can put yourself in the shoes of a small business owner. Imagine that you own an electronic goods store and you sell televisions--imagine that you are a shoestore owner and you sell shoes for kids and adults--and somebody comes into your electronics store and they look at all the TVs, they call over your salesperson and they get the whole briefing on what is best and how you hook it up and all of the technical details about it, and they see exactly what they want. Then, when they have decided what they want, that is the moment when they should reach into their wallet and pull out their credit card and say: I will take that one. I will buy it. Instead, they reach into their pocket and they pull out a notepad and they write down the details of the television they were looking at, and they say thank you very much to the store owner, and they walk out and they buy it off the Internet.

The brick-and-mortar store has put all the expense into having the overhead, into having the television there, and into having the expert salespeople there, and a consumer takes advantage of that but then does not buy it, goes outside. That may still happen, but it will happen less if we can take out the unfair disadvantage that brick-and-mortar store owner has and put that back into balance.

I have had a shoestore owner say the same thing. A parent comes in, sits the kids down, and has the sales clerk bring out boxes of shoes. They try them all on, see which ones the kids like, see which ones fit best. Then, when they are all done and they are ready to make their purchase, again, out with the notepad. They write down the brand of the shoe, the size of the shoe, and then walk out of the store, and there is the sales clerk left to box up the shoes, wrap them back up in the paper, take them back in the back again, and they took all that effort and all that expense and they never made the sale.

Again, there are advantages to shopping on the Internet, and there are probably times when that kind of behavior by consumers will continue. But why add the subsidy of uncollected taxes to the advantages the Internet shopper has? Our local stores, our local small businesses need to have this set right and set into balance.

There has been a concern raised that the Marketplace Fairness Act would create all this immense bureaucracy and it would be so difficult to do this. That is really not true. The computer and billing systems that exist right now make this a virtually seamless transaction, and States are obliged before they can do it to come into compliance with the Streamlined Sales and Use Tax Agreement, which is a compact among States, developed by them, that has coordinated the different State tax laws so that this process can be easy and streamlined.

So I think this is a good moment coming for us after a very lousy week last week. We have the chance to get together on a bill that in the budget process I think gathered 70 votes--maybe more than 70 votes. I do not remember the exact count, but it was a very strong majority in this body. It was a completely bipartisan vote, with proponents and opponents on either side.

But I think that in the interest of fairness, in the interest of economic efficiency, in the interest of not picking winners and losers, and in the interest of helping to move our economy forward and protecting our stores that are on our Main Streets and in our shopping centers and shopping malls, this is a good thing to do. So I hope we will come together and pass this bill and show that we can act productively and in a bipartisan fashion and that we will do so this week.

I thank the Presiding Officer and again thank the chairman of the Commerce Committee for his leadership and enthusiasm.

I yield the floor and suggest the absence of a quorum.

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