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.
Many members of the committee, from both sides of the isle, demonstrated their support for this legislation, showing signs that the bill will move on to the next steps of the legislative process (the following quotes are paraphrased):
"Because these businesses have a presence in the community, they have far more to deal with (like hurricanes!) and already face a disadvantage. States need to have the ability to collect this tax that hasn't been paid for years because they weren't allowed to collect." - Representative Poe (R-TX)
"Without this legislation, a lot more at stake than just one retailer. A whole community is at stake, which is why I am supportive of this legislation." - Representative Deutch (D-FL)
"I support this bill because of fairness." - Representative Griffin (R-AK)
"Current burden on consumer to remit the use tax owed is far worse that the burden that would be put on small businesses with this legislation." - Representative Chu (D-CA)
The hearing concluded without a vote, meaning that a vote to move this bill out of committee and on to a full vote by the entire U.S. House of Representatives will be scheduled for the future.
You may be asking if there is anything you can do to help make sure this bill is passed. Well, there is! Arizona Representatives Ben Quayle and Trent Franks are members of the Committee on the Judiciary and will be voting on this bill. You can contact them to let them know that you support moving H.R. 3179 out of committee to help level the playing field for all local businesses in Arizona:
Representative Ben Quayle (District 3)
Phone: 602-263-5300 (District Office); 202-225-3361 (DC Office)
Click here to send an email
Representative Trent Franks (District 2)
Phone: 623-776-7911 (District Office); 202-225-4576 (DC Office)
Click here to send an email
Take a minute to call or send an email to let our Arizona Representatives know that businesses and consumers in Arizona support this legislation.