E-Fairness Legislation Moving Through Congress
Yesterday, the Committee on the Judiciary of the U.S. House of Representatives took a significant step forward with an important piece of legislation that will level the playing field for brick-and-mortar businesses across the nation. The committee held a hearing to listen to expert testimony on H.R. 3179, or the “Marketplace Equity Act of 2011.” This bill, a bipartisan piece of legislation widely supported by members of both major political parties, would close a significant loophole that places retailers with a brick-and-mortar presence at a significant disadvantage to online retailers. As the law stands right now, “online-only companies can achieve as much as a 10% price advantage over brick-and-mortar retailers by not collecting state sales tax.” According to The Alliance for Main Street Fairness, H.R. 3179 would remedy this problem by accomplishing the following:
- Closes a loophole exploited by online only giants to the detriment of traditional Main Street bricks-and-mortar retailers. The bill ensures that a sale is a sale is a sale, and no one class of merchants is given a government-sanctioned, unfair advantage.
- Gives states the authority to manage their sales tax laws as they see fit by granting them the authority to collect monies that are owed, but difficult to collect from out-of-state vendors.
- Provides a simplified system for state collection authority. In order to qualify, a state (individually or through an interstate compact) must implement a system that meets four minimum requirements: a robust small business exemption; a consistent rate throughout the state; a uniform set of rules; and a centralized filing point.
- Relieves constituents of a reporting burden that few are aware of and even fewer abide by. By shifting collection and reporting back to the vendor, consumers don’t have to worry about being held liable by states.
- Provides self-help for the states without adding a penny to the federal deficit.
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