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To Mark The Third Anniversary Of Successful Senate Vote, Marketplace Fairness Coalition Calls On Congress To Finish Its Work, Pass Online Sales Tax Legislation

May 6, 2016

For Immediate Release

Media Contact:

Jared Favole

Marketplace Fairness Coalition

202.822.1205

jfavole@hamiltonps.com

Washington, D.C. – Friday marks the third anniversary of the U.S. Senate passing the Marketplace Fairness Act by a vote of 69-27. The Marketplace Fairness Coalition released the following statement to mark the anniversary:

"It has been three years since the Senate overwhelmingly voted to pass bipartisan legislation that would level the playing field for mainstreet businesses and online retailers. Unfortunately, this commonsense legislation has been stalled in the House, and this inaction is profoundly hurting our communities.

"Cities across America are unable to collect a significant portion of their sales tax revenue, which means fewer first responders and teachers. And states are being forced to pass a patchwork of laws that are confusing and cumbersome for job creators trying to compete in a global economy.

"If Americans are going to innovate, hire, and compete with businesses around the world, Congress needs to act. We urge the House to act immediately by marking up a bill in the Judiciary Committee."

See below for more details on how the online sales tax loophole is impacting states and local job creators.

Columbia, Missouri Is Losing $10 Million A Year In Sales Tax Revenue Due To Online Sales, Which Is A “Direct Cause” Of City’s Failure To Hire More Police Officers  And Firefighters. “The city is losing $10 million per year in sales tax revenue to online purchases, and city officials say the time has long since passed to do something about it. Online retailers aren't required to collect sales tax on purchases from people in states where the businesses have no physical presence. The steady increase in online shopping means fewer purchases at local brick-and-mortar stores and declining sales tax revenue for cities such as Columbia...City Manager Mike Matthes said lagging sales tax income is a direct cause of the city's inability to hire more police and firefighters.” (Kelsi Anderson, “City Officials Seek Answer To Internet Sales Tax Hole,” Missourian, 3/7/16)

Virginia Businesses Have Been Downsizing And “Shutting Their Doors” Due To Online Sales Tax Loophole, Says Owner Of Clothing Business. “For decades, local businesses have been downsizing and in some cases shutting the doors because of this loophole. It is not fair for small businesses to collect and remit taxes while Internet sellers are given a 6 percent price advantage. Passage of Marketplace Fairness will ensure that brick-and-mortar retailers will finally be able to operate on a level playing field. the infrastructure for internet sales tax is in place. Protections for infrequent sellers have been included in the legislation and the technology exists so these taxes can be automatically collected and remitted to the state by the seller.” (Larry Davidson, “Pass Marketplace Fairness Bill,” The Roanoke Times, 4/10/16)

Oklahoma Loses $150 Million Per Year Because Of Online Sales Tax Loophole. “Senate author Stephanie Bice, R-Oklahoma City, told The Oklahoman’s Rick Green the state loses as much as $150 million per year due to people who don’t claim the use tax.” (Brian Hardzinski, "Online Sales Legislation Proponents Say Dodging Use Tax Costs State $150M Per Year," KGOU, 4/4/16)?

Texas Small Business Calls For Updating The Sales Tax Code. “Technology today means keeping track of tax rates is no longer an insurmountable technical, administrative, or financial burden. I am a small-business man with a website and a local brick and mortar location. We ship all over the U.S. and overseas. I have been actively advocating passage of this type of legislation for over 5 years. I have no qualms about operating under rules such as those proposed." (Gene Schade, "Small Businesses Losing Out On Unpaid Sales Tax," Corpus Christi Caller Times, 4/6/16)

Washington Faces Fiscal Challenge Because Of Eroding Retail Tax Revenue. “Here’s one reason why Washington's revenue is so low. The state leans hard on a retail sales tax, which held its own in the eighties. But the internet has changed that. 'The sales tax really started eroding much more than in the past because of online sales,' said Norton Francis, research associate at the Urban-Brookings Tax Policy Center in Washington DC.” (Carolyn Adolph, "Washington's Tax Revenue Would Be Double - If It Was Idaho," Northwest Public Radio, 4/5/16)

Vermont Loses “Over $50 Million A Year” In Sales Tax Revenue Due To Online Sales, Hurting State Budget And Local Businesses. “This hurts Vermont businesses. It gives online-only sellers a big advantage over local brick and mortar stores, many of which are located in our downtowns and village centers. It hurts our state treasury to the tune of over $50 million a year in lost revenue. In fact, if the state was receiving its fair sales tax revenue, none of the other revenue enhancements in the tax bill would be necessary!” (Paul Bruhn, “Statehouse Leadership Fights For Vermont Businesses And Communities,” VTDigger.org, 4/10/16)

Gonzales, Louisiana City Officials Say Online Sales Are Behind Slowing Sales Tax Revenue, Which Fund 70 Percent Of City’s Essential Services. “City officials believe a combination of new retail available in Ascension Parish and growing use of online shopping are behind the sluggish sales tax revenues that Gonzales is seeing for the first time in years…Sales tax revenues make up 70 percent of the city’s general fund, which pays for personnel, operations of the Fire Department and Police Department, sanitation, streets, drainage and recreation facilities.” (Ellyn Couvillion, “Gonzales Officials Keeping Watchful Eye On Budget As Sales Tax Revenue Growth Slows,” The Advocate, 4/30/16)

Virginia Business Owner Says Local Businesses Face A “Rigged Game” Without Online Sales Tax Legislation. “Local retailers such as myself are hurting right now because we face a rigged game. A pre-internet tax loophole has made it so sales tax collection, which brick-and-mortar stores are legally obligated to do, has distorted the marketplace and caused real harm to community businesses.” (Tim Wright, “Letters: Hampton School Board, Internet Taxes, Political Parties,” Daily Press, 4/23/16)

Kansas Is Missing Out On Over $200 Million Annually In Uncollected Sales Tax Due To Online Sales. “State officials estimated Kansas is missing out on $200 million or more annually in lost internet sales tax revenue.” (Tim Carpenter, “Kansas House, Senate Affirm Package Of State Tax Reforms,” The Topeka Capital-Journal, 4/30/16)

Officials In South Dakota, Utah, And 10 Other States Want Congress To Solve Online Sales Tax Issue. "Mr. Garrett and like-minded officials in South Dakota, Utah and 10 other states are tired of waiting for Congress to write national rules to let them collect sales taxes from out-of-state Internet retailers. So, in a loosely coordinated effort, they are moving to impose those taxes themselves and daring merchants to challenge them. The gambit is aimed at creating business blowback and a confusing national patchwork of laws that might prompt Congress to act. Short of that, the states want their moves to be questioned legally so they can ask the Supreme Court to overturn a 1992 ruling that forbids taxation of Internet sales by retailers that lack a physical location in a state.” (Richard Rubin, “States Set Up Fight Over Web Sales Tax,” The Wall Street Journal, 2/23/16)

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