U.S. Senate Passes Sales Tax Fairness Legislation

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On Monday, May 6, in a hard-earned victory for proponents of sales tax fairness, the U.S. Senate passed the Marketplace Fairness Act of 2013 (S.743) by a vote of 69 to 27. The legislation would give states the authority to require remote sellers to collect and remit sales tax in the state, so long as the seller does $1 million or more in remote gross sales annually. The bill now moves to the U.S. House of Representatives, where it is expected to face a tough fight for passage.

“We are grateful that the U.S. Senate has done the right thing and is standing up for Main Street retailers by passing the Marketplace Fairness Act,” said ABA CEO Oren Teicher, who thanked the bill’s sponsors, Senators Lamar Alexander (R-TN), Richard Durbin (D-IL), Michael Enzi (R-WY), and Heidi Heitkamp (D-ND), for introducing the legislation. “This victory is the direct result of the tireless work of thousands of booksellers nationwide, who, year after year, have advocated for sales tax fairness. Recognizing that this fight is far from over, importantly, today we are one very important step closer to leveling the playing field for Main Street retailers.”

Teicher noted the important work of the regional booksellers associations in helping to secure passage of sales tax fairness legislation at the state level over the past several years. “These efforts absolutely helped keep the pressure on Congress to take the action that it did. Their leadership has been critical.”

ABA is asking booksellers whose Senators voted for S.743 to contact their offices and thank them for their vote.

Now, the Marketplace Fairness Act moves to the Republican-controlled U.S. House of Representatives, where the legislation is expected to face a tough challenge. Teicher noted that the association would soon be reaching out to booksellers, asking them to contact their elected representatives in the House to voice their support of the bill. “As we move to the House, more than ever, we will need our members to make sure they are heard,” he said.

If the bill does pass the House, it’s expected that President Obama will sign the legislation into law. In late April, the White House endorsed the Marketplace Fairness Act. “This administration has carefully considered the legislation, and our team has met with a broad array of people on the issue,” White House Press Secretary Jay Carney said, as reported by The Hill. “And we have heard overwhelmingly from governors, mayors, and the business community on the need for federal legislation to level the playing field for our businesses and address sales tax fairness.”

Carney added that the legislation would also correct an unfair advantage currently held by online retailers, who are not required to collect and remit sales tax in states unless they have a physical presence in the state.

“Because these out-of-state companies are able to cut corners and play by a different set of rules, the cities and states lose out on funding for K-12 education, police and fire protection, access to affordable health care, and funding for roads and bridges,” Carney noted.