Bipartisan Group of Senators Introduce Marketplace Fairness Act of 2017 to Allow States to Close Sales Tax Loophole

Posted on April 27, 2017

U.S. Senators Mike Enzi, (R-Wyo.), Dick Durbin, (D-Ill.), Lamar Alexander, (R-Tenn.), and Heidi Heitkamp, (D-N.D.), today introduced the Marketplace Fairness Act of 2017 – legislation that would give states the right to collect the sales and use taxes they are owed under current law from out-of-state businesses or online retailers.

“The Marketplace Fairness Act 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,” Enzi said. “Right now, thousands of local brick and mortar businesses are forced to do business at a competitive disadvantage because they have to collect sales and use taxes and remote sellers do not. This legislation promotes internet fairness by putting Main Street businesses on a level playing field with online retailers. In 2013, the Senate passed this bill with bipartisan support. It’s time to give states the right to enforce their own laws without having to get permission from Washington.”

“By ensuring Internet retailers meet the same tax responsibility as local businesses, the Marketplace Fairness Act creates a level playing field and gives small business owners – our nation’s job creators – a real shot at success,” Durbin said.

“The Marketplace Fairness Act is about internet fairness and it is about two words: states’ rights – and no state should have to play ‘Mother, may I?’ with the federal government when deciding whether to collect, or not collect, a state tax that is already owed,” Alexander said. “Congress should provide Tennessee – and every other state that wants to collect state sales taxes that are already owed – with a legislative solution that will make collection efficient and simple for small businesses. The Senate passed this legislation in 2013 with 69 votes, and I’m hopeful we’ll pass this legislation with an even larger bipartisan margin this Congress.”

“No North Dakota brick and mortar business should ever have to close their doors because they lack a tax advantage online retailers have,” Heitkamp said. “Since serving as North Dakota’s Tax Commissioner, I’ve been working to make sure mom and pop shops are not discriminated against through unfair tax policies that favor retailers doing business remotely with customers in our state. We can level the playing field for our local businesses by giving states the option to make sure the marketplace – online or in stores – is fair.”

The Marketplace Fairness Act of 2017 would grant states the right to require that out-of-state businesses, such as those selling online or through catalogs, collect state sales taxes on purchases sold into their states. Currently, states are unable to collect these taxes on purchases from remote businesses so the tax is often not paid. This sales tax loophole  treats out-of-state retailers different than local brick-and-mortar businesses, creating a price disadvantage.

Senators Elizabeth Warren, D-Mass., Roy Blunt, R-Mo., Jack Reed, D-R.I., Sheldon Whitehouse, D-R.I., Mark Warner, D-Va., Ben Cardin, D-Md., Tim Kaine, D-Va., Edward Markey, D-Mass., Tammy Duckworth, D-Ill., and Mike Rounds, R-S.D., are also cosponsors of the legislation.   

For more information about the bill:

Click here for one-pager of the legislation.

Click here for a section-by-section of the legislation.

Click here for the full text of the legislation.