The Marketplace Fairness Act of 2015 would give states the option to require out-of-state businesses, such as those selling online or through catalogs, to collect and use taxes already owed under State law the same way local businesses do.
U.S. Senators Mike Enzi (R-WY) , Dick Durbin (D-IL), Lamar Alexander (R-TN) and Heidi Heitkamp (D-ND) also sponsored similar legislation during the last Congress which passed on an overwhelmingly bipartisan basis by a vote of 69 to 27 on May 6, 2013. Additional co-sponsors of the new bill include U.S. Senators Roy Blunt (R-MO), Jack Reed (D-RI), Bob Corker (R-TN), Sheldon Whitehouse (D-RI) and Angus King, Jr. (I-ME).
So who is for it and who is against the Marketplace Fairness Act?
Basically, retailers are split into two camps: Those with brick and mortar locations who already charge a state sales tax based on physical location of the buyer, and pure plays and traditional direct-to-customer merchants, such as catalogers, who do not have to charge their customers sales tax unless they have a physical presence in a state, per the 1992 Quill Corp. vs. North Dakota Supreme Court ruling.
For the most part, retailers with physical storefronts, and the associations that support them, are in favor of Marketplace Fairness Act. The majority of direct-to-customer merchants without storefronts, and the associations that support them, are against the bill, which has been introduced by Senate three times this decade.
Amazon had been against Marketplace Fairness Act for some time, but changed sides in 2012.
Although the American Catalog Mailers Association had not seen the actual language Tuesday, President and executive Director Hamilton Davison said in an email to Multichannel Merchant that it appears the “new” Marketplace fairness Act is the same as the one passed out of the Senate nearly two years ago, but was never taken up in the House.
“There’s a good reason for that – it’s an unworkable bill,” Davison said. “It’s not only unfair for catalog and internet retailers, but many Main Street brick-and-mortar retailers too, who rely heavily on online sales to out of state customers in order to survive the ongoing onslaught of big-box retail.”
Davison said the Marketplace Fairness Act forces remote sellers to collect sales taxes from customers residing in some 10,000 different taxing jurisdictions around the country, figure out all the assorted unique local sales tax holidays, and determine when some products are considered taxable in one jurisdiction but not in another.
“Perhaps above all else, it will cost a fortune for many remote retailers in software maintenance, installation and other fees not associated with the so-called ‘free software’ MFA would mandate,” Davison said. “ACMA and the True Simplification of Taxation coalition we co-founded three years ago will demonstrate how MFA fails our simplification requirements and will do all that’s necessary to ensure this awful bill not make it to the President’s desk.”
The National Retail federation, the Retail Industry Leaders Association, the International Council of Shopping Centers and the National League of Cities all issued statements yesterday saying they are in favor of the bill.