Retailers to Congress: Pass the Marketplace Fairness Act
There were very few people who thought the Marketplace Fairness Act, passed with 69 votes in the Senate in 2013 but never acted on by the House, had any chance of being revived when Republicans won majorities in Congress in last November’s elections. While the future is unclear, groups including the National Retail Federation (NRF) and Retail Industry Leaders Association (RILA) are throwing their support behind the reintroduction of the act by Sen. Mike Enzi (R-WY) and Sen. Dick Durbin (D-IL).
"Retailers should be allowed to compete for customers and sales on price, service and selection and not forced to compete on whether or not they collect state and local sales tax," said David French, NRF’s senior vice president for government relations, in a statement.
The reintroduction of the Marketplace Fairness Act is well timed, said Mr. French, because it "comes on the heels of Supreme Court Justice Anthony Kennedy’s admission last week that the Court got it wrong on sales tax collection two decades ago and should revisit its decision."
"Ending the special tax treatment afforded to online-only retailers has been a top legislative priority for the retail industry, and it’s time to finish the job in 2015," said Joe Rinzel, senior vice president for government affairs at RILA, in a statement. "All retailers deserve a fair shot to compete in the free market without the government’s thumb on the scale."
In a RetailWire poll last November, 75 percent said it was unlikely that sales tax fairness legislation would be passed in the current Congress.
Discussion Questions
What effect would passage of the Marketplace Fairness Act have on retailers? Why do you think the legislation has not yet passed when it has the strong support of NRF and RILA?
This Congress can’t agree on anything more sophisticated than naming post offices. They’re not even sure they want to keep Homeland Security open. There’s pretty much a zero chance that Congress will agree to a restructuring of the sales tax.
In the circus atmosphere of a polarized Congress, where you are either a savior of the people or the devil himself, I expect a lot of sermons from both sides. And these are not “new” taxes, they were supposed to be collected voluntarily.
States are cash-strapped and vacant buildings in downtowns are visible reminders of customers going somewhere else to shop. With this legislation, at least the taxes that are needed to support your community will stay behind. I wrote more about the Marketplace Act here.
The bigger question to ask is, “Why hasn’t any legislation of meaning been passed by Congress?”
Good question.
While the NRF and RILA are trying to have an even playing field across all online and off-line retailers, Congress is not always aligned with that goal. Supporting the Marketplace Fairness Act doesn’t have the optics sought by conservative economic evangelists. Even the name that includes the word “fairness” is probably off-putting to those who are likely to create barriers to passage. Finally, if lobbyists have the strongest persuasive arm, I’ll have to assume that the NRF and RILA don’t have that type of effective backing … yet.
It hasn’t passed, in part, because it’s bad for consumers (at least on the surface). I’d rather not pay taxes if I don’t have to.
Little to none.
I am going to be the contrarian this morning and not bash Congress. In my view, the dysfunction in Congress only reflects the growing division among the voters who put them there. Ironically, this division is being propagated by the other two branches of government with executive actions and judicial activism. Plenty of blame to go around.
With sermons complete, the only way anything will get done in this Congress or any Congress future or past, is to find bi-partisan advocates of the bill, particularly in the House. It is not certain if that is possible at the moment with much bigger battles being debated.
I have mixed emotions about legislation intervening in the free market with the so-called goal being “legislative fairness.” As we have learned from other such efforts, the “law of unintended consequences” kicks in and just makes matters worse.
Any law that has the word “fairness” in its title always concerns me. Ever since my state enacted a law requiring Amazon to collect sales tax, my family’s prodigious Amazon purchases have fallen dramatically. More importantly, I know our purchases have not picked up elsewhere in proportion. The lazy rainy afternoon and snowed-in online shopping sprees are pretty much a thing of the past. We have more money in our checking account and the nation’s economy has less money floating around in it. The economy has way more moving parts than taxation of goods. This law does not have broad public support.
It’s an issue only guaranteed to grow as online grows, of course. As a consumer I’ve enjoyed the tax relief, but as a retailer and professional I’ve never fully understood the justification for these being sales tax exempt. Of course, if passed, online prices will jump several percent (net to customer) which could level the playing field a little more (read: amazon.) Even those who are multichannel are likely to favor the legislation. To what effect? They’ll feel better about competing with Amazon. And will. One barrier removed.
Why hasn’t is passed? Question is why wasn’t it ever picked up by the House? For that, you’ll have to dig deeper than I can. Perhaps it was to support a small but growing industry. Perhaps it was lobby.