Marketplace Fairness Act

Floor Speech

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Mr. DURBIN. Madam President, first, let me thank my colleagues Senator Enzi, Senator Alexander, and Senator Heitkamp for their work on this important issue.

Senator Alexander is right about the Federal ban on Internet access taxes. I also want our colleagues to know that the Marketplace Fairness Act would dramatically simplify and streamline the country's more than 9,600 diverse State tax jurisdictions.

The bill provides States with two options that would allow them to begin collecting State sales taxes from online and catalog purchases. Both options would reduce the number of returns and audits businesses would have to file from 9,600 to fewer than 50.

The bill also exempts businesses with less than $1 million in online or out-of-State sales from collection requirements. This small business exemption will protect small merchants and give new businesses time to get started.

Critics of the bill should not get away with saying this type of simplification can't be done. The different tax rates and jurisdictions are no problem for today's software programs. When you order something online, you have to put in your zip code. The zip code will tell you exactly how much is owed in sales and use taxes. As Senator Alexander has said, it is as simple as looking up the weather.

We also made it very clear in the bill that States cannot require remote sellers to collect sales and use taxes already owed under State and local law until the State implements sales and use tax simplification requirements and is able to provide software to sellers free of charge.

Our goal is to allow States to satisfy the requirement to provide software free of charge under section 2(b)(2)(D)(ii) of the Act either by developing the software themselves or by using the services of certified software providers. If a remote seller elects to deploy and utilize a certified software provider, the seller should be permitted to deploy and utilize a certified software provider of their choice per section 3(c) of the Act. It is not our intent to allow or encourage States to require remote sellers to use the software provided by the State or certified software providers or penalize remote sellers for not using such software or certified software providers.

Now I want to go back to an issue my colleague, Senator Enzi, mentioned earlier. This bill does not expand or enlarge the authority of States to impose sales and use taxes on products or services. And it does not urge States and localities to impose financial transaction taxes. The bill only applies to sales and use taxes, so financial transactions taxes are excluded from the authority under the Act.

In almost 200 years of sales and use tax history in the United States, no State or locality has imposed a sales or use tax on financial transactions and no State is proposing to do so today. The Marketplace Fairness Act simply authorizes States to require remote sellers to collect taxes that are already owed under current law. As my colleague said, the bill is very clear and states:

(d) NO NEW TAXES.--Nothing in this Act shall be construed as encouraging a State to impose sales and use taxes on any goods or services not subject to taxation prior to the date of the enactment of this Act.

I would like to ask my friend Senator Enzi if he agrees.

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