On April 27 the U.S. House and Senate reintroduced bipartisan bills that would allow states to collect taxes from residents on goods purchased online regardless of where the seller of the goods is based.
S.976, The Marketplace Fairness Act (MFA), has a small-seller exemption for annual sales of less than one million. H.R. 2193, The Remote Transactions Parity Act (RTPA), also has a small seller exemption, but sets the threshold at $10 million per year.
The RTPA bill was reintroduced in the House by Representatives Kristi Noem (R-SD-AL), Steve Womack (R-AR-3), Jason Chaffetz (R-UT-3), Steve Stivers (R-OH-15), Lou Barletta (R-PA-11), John Conyers (D-MI-13), Jackie Speier (D-CA-14), Peter Welch (D-VT-AL), Suzan DelBene (D-WA-1), and David Cicilline (D-RI-1). The MFA bill was reintroduced by Senators Lamar Alexander (R-TN), Mike Enzi (R-WY), Dick Durbin (D-IL), and Heidi Heitkamp (D-ND).
“Folks shouldn’t have to pay a premium at the register just because they’re supporting a local business,” said Rep. Kristi Noem (R-S.D.). “Unfortunately, the existing inequality means the deck is too often stacked against our Main Street retailers."
Sen. Mike Enzi (R-Wyo.), a lead sponsor of the Senate bill, said the measure "is about supporting jobs and services we have in our towns, while ensuring states have the ability to collect taxes they are owed, if they choose to.”
The previous Marketplace Fairness Act passed in the Senate in 2013 by a vote of 69 to 27, with strong bipartisan support. Based on research by ICSC and the National Conference of State Legislatures, states lost an estimated $26 billion to the online sales tax loophole in 2015.
ICSC President and CEO Tom McGee released the following statement:
“We are pleased that legislation was reintroduced in Congress this week to empower states to modernize their tax laws and provide parity to local businesses and the communities they serve," said McGee. "These important measures will fix an outdated tax loophole that currently gives online retailers a price advantage of up to 10 percent over brick-and-mortar stores, has shortchanged communities on much-needed sales tax revenue and overcomplicated our country’s current sales tax system."