Speeches & Floor Statements

Floor Speech: Marketplace Fairness Act

Posted on November 19, 2014

Senator Enzi has been a leading proponent of the Marketplace Fairness Act.  I congratulate him for his persistence in recognizing its importance.

I will make three points in support of what he said. Number 1: Why conservatives support it; Number 2: Why it is easy to do; that is, to comply with it; and Number 3 is to ask the basic question, “Do you trust Washington or do you trust your governor and your state legislature to decide what your state taxes ought to be?” Do you trust Washington or do you trust people closer to home? 

I will begin with why conservatives support it. If I were to ask the question, what do the following people have in common, and the following people would be Al Cardenas, the most recent chairman of the American Conservative Union; the late William F. Buckley; Art Laffer, who is President Reagan's favorite economist; Governor Mike Pence, the conservative Governor of Indiana; Governor Gary Herbert; Governor Robert Bentley; former Governor Mitch Daniels; and former Governor Jeb Bush, you might say, “What do they have in common?”

Well, they are Republicans; that is right. They are conservatives; that is true.  But the other thing we could say is they all support the Marketplace Fairness Act or the principles that underlie it. 

Why is that?  Because the Marketplace Fairness Act is a 12?page bill about two words, which are “states’ rights.” If I am the governor of Tennessee – which I once was – and I am sitting down there thinking, “Well, we have a state sales tax in Tennessee such as almost every state has, and the way we collect it is this: Let's say I am in my home town of Marysville, TN, and I want to buy a television set. I can go downtown to buy it from one of my local stores.  They collect the state sales tax, which in our state, including state and local taxes, is nearly 10 percent. They send it to the state. 

If I go online or into a catalog and order the same television set, the seller does not collect it. This bill is about allowing the state of Tennessee to decide whether it wants to require the out?of?state sellers to do the same thing that instate sellers do, whether it wants to prefer some distant seller over the local man and woman on Main Street, the mom?and?pop stores. That is the decision. 

Whatever decision they would make, the question is this. Do you think we should be deciding that for Tennessee? Our governor doesn't think so, our Lieutenant Governor doesn't think so, our legislature doesn't think so. They don't trust Washington to make the decision.  They trust themselves to make that decision. 

Ohio doesn't think so. Ohio has already taken a look at this subject and said, “We would prefer to collect our sales tax from everybody who owes it. Rather than have everybody in Ohio fill out a form every time they go online or order from a catalog, Ohio wants to require the out?of?state sellers do the same thing in?state sellers do, and that is to collect the tax when they sell it.” Ohio has said if they do that, they will lower taxes. Ohio has already passed a law and says if Congress passes the Marketplace Fairness Act taxes in Ohio will go down. 

Madam President, I ask unanimous consent to have printed in the RECORD following my remarks a list of conservatives and Republican Governors who support e?fairness and why they do so. 

The other point is how complicated is this for somebody who might sell online? Well, as Senator Enzi said, it exempts 99 percent of all out-of-state sellers. So if you are selling on eBay today and you are worried about this bill, the chances are 99 out of 100 it is not you this bill affects because it has a $1 million exemption. 

But even if it did affect you, how hard would it be to comply with the requirements. It must not be too hard because you could also go on eBay, I am assured, and you can purchase software from eBay that costs $15 or $20 and it will do the work for you. In other words, if you are selling something online and you are selling it to Maryville, TN, they will put the zip code in and tell you the tax. You can collect it and remit it to the State government. It is about as easy as what I do every morning. 

I go to my computer, I type in "Google," put my zip code in, and I put "weather." I want to know it is 24 degrees in Washington, DC, this morning. It tells me in an instant.

If you are selling online – unless you are selling more than $1 million in out–of–state sales it doesn't affect you at all.  If you need some help to figure that out, you can get software that figures out the tax for you. 

But remember, all we are asking – we are not even saying that we think if you sell online or if you sell by catalog that you ought to be made to collect the tax when you sell. We are just saying we think states should make the decision about their own tax policy which is consistent with the 10th Amendment to our Constitution.        

That leads me to my last point.  The real issue here is two words. You can make a lot of good conservative reasons why this bill attracted half the support of Republicans and passed with 69 votes when it was considered by the Senate, and why it has so much support from governors and mayors of all political persuasions across the country.  But the bottom line is all we proposed to do is to let states make decisions about their own tax policy. 

The Supreme Court more than 20 years ago said it was too complicated to require businesses to collect, but they invited Congress to create a way that was simple enough to do that. Twenty years has gone by, software is already available, the Internet is advanced, and so today it is very easy to do. 

There is no reason in the world for senators to say, “You know, I just flew from Nashville today. It took me an hour. That makes me a lot smarter than the governor of Tennessee, so I am going to decide for Tennessee whether it can collect all the taxes that are already owed. I am going to say I am going to let the governor of Tennessee make that decision. If I were the governor of Tennessee, I would collect it, and I might lower the taxes for everybody. I don't think it is fair to say to shopkeepers in Maryville, TN, that you have to collect the tax and send it to the state, but to say to some seller in Illinois or some catalog seller in North Dakota that you don't have to collect the tax, because that means our local businesses are being dealt with in an unfair way. 

I also don't think Tennesseans appreciate what will happen if we don't act, because do you know what is going to happen? The governor is going to collect the sales tax.  How is he going to do it?  Well, he is going to have to start auditing everybody.

If you buy online – which everybody almost does today; just think of the Christmas season coming up – you would have to write down every single thing you bought.  You would have to put the tax down, and you would have to send it in – that is the law. That is a very difficult thing to do and most people don't do it. 

So the easy way to do this and the right way to do this is for Congress to pass the Marketplace Fairness Act, which is a 12?page bill about two words – states’ rights – and say to Tennessee, Wisconsin or Wyoming, of course you should make your own decision about how to collect your taxes. Let them decide, as Ohio decided. They will collect the state sales tax which is already owed from everybody who owes it.  The collectors of the tax will be anyone who sells into Ohio or Tennessee or Wisconsin or Wyoming. 

That is the fair thing to do. That is the right thing to do. That is what respects our constitutional federalism and the Tenth Amendment to the Constitution. It shows that we in Washington, DC, aren't so arrogant to think that we should make those state tax decisions. 

I conclude by saying I just had the pleasure of going through a reelection campaign. A lot of members, about one?third of the body, were in an election this year. I was trying to remember this morning if one single person came up to me in the past two years and said, “I just wish you would give Washington more control over how Tennessee collects its taxes.”

I don't think one single person said that to me. But I will guarantee that about every other person said to me, “I wish you would stop Washington from telling us to do things or decide things that we should be deciding for ourselves.”

That is what this bill is about. This bill empowers every state to make its own decision about how to collect its taxes – to do what Ohio did, to do what other governors have said. We are going to collect it from everybody who already owes it and, when we do, we are going to lower everyone's taxes. That would be a very happy result. 

We have two or three weeks left in the session. This Senate has fully considered this.  The bill is in the House of Representatives.  I very much hope that the Speaker and the members of the House will decide that it is time to pass the Marketplace Fairness Act and recognize the principle of states’ rights in the spirit of the 10th Amendment of our Constitution.


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