Speeches & Floor Statements

Floor Speech: Upholding states' rights with Marketplace Fairness Act

May 6, 2013 - May 6, 2013

We have an opportunity to vote today on an important piece of states’ rights legislation -- at least that is the way I look at it as a former Governor of Tennessee. 

Here is what the legislation does.  It is called the Marketplace Fairness Act.  There are many reasons to support it, but the reason I like it is because it gives governors and legislators the opportunity to decide for themselves whether they can require out-of-state sellers to do the same thing in-state sellers are required to do; that is, to collect the sales tax already owed. 

Let me say that again.  This legislation is states’ rights legislation.  It allows governors and legislators in Maine or Tennessee or wherever -- Illinois -- to decide for themselves whether they want to require out-of-state sellers to do the same thing in-state sellers already do, which is to collect the sales tax that is already owed when something is sold. That is it.

Before I went back to Tennessee, some people here were saying: We don't trust the states to make this decision.  I think I know the answer to that from Tennesseans.  I have spent the last week going from one end of our state to the other.  Everywhere I have gone, I have asked a question.  I said:  There are some people in Washington who said they trust Washington to make a decision more than they trust Governor Haslam and Speaker Harwell, Lieutenant Governor Ramsey, and the Tennessee Legislature to
decide what to do about taxes.

The last time I checked, Tennessee had a AAA bond rating, no state road debt, one of the lowest tax rates in the country, and was named the second-freest state in the country.  And the last time I checked, Washington, DC, was running up $1 trillion of debt and more every year. 

Nobody in Tennessee trusts Washington more than the Governor and state legislature to decide what to do about taxes, particularly when it comes to whether we are collecting a tax that is already owed.

This is such an obvious piece of legislation that many of the opponents have resorted to interesting arguments, let's say, in opposition to it. 

It has been said that the bill should have gone through committee.  Well, it went to committee, but the chairman -- a very respected member of this body -- doesn't like the bill, so he didn't report it to the floor.  So that is why it didn't get out of committee.

They have said it should have more amendments.  All of us, particularly on our side of the aisle -- we are in the minority -- would like to have as many amendments as we can.  But there is one reason this bill didn't have amendments, and that is because opponents to the bill objected to every single amendment, every single one, even amendments they support.  Senator Pryor and Senator Blunt offered a 10-year extension of the moratorium on Internet access taxes, and the senator from Oregon objected to that even though he wrote the original act.

Some have suggested that what we are talking about is a tax on the Internet, but every Senator knows there is a law against a tax on the Internet. 

Some have said:  Well, it is a new tax.  But of course it is not.  It is an existing tax.  One of my colleagues over here said that the only thing he hates worse than a tax is somebody who doesn't pay a tax that is owed.  This is a tax that everybody owes that only some people pay.  What we are trying to say to the governor of Maine or to the governor of Tennessee or to the governor of Illinois is this:  You can decide for yourselves, without playing "Mother, may I?" to Washington, DC, whether a state wants to treat some taxpayers one way and some another way, some businesses one way and some businesses another way.

Then there are some who say it is too complicated. Well, this is how complicated it is.  If I order ingredients to make ice cream over the Internet from Williams-Sonoma, I put in my name, my address, and my ZIP Code, and the software figures out the sales tax, collects it, and sends it to the state of Tennessee, how hard is that? 

I guess the complete answer to that is that a majority of Internet sales today collect the sales tax that is owed.  If it is so hard, how are they doing that?  Let me say that again.  A majority of the retailers that sell over the Internet today collect the sales tax when it is owed using the software that is as simple as looking up the weather on a person's computer.  I look up the weather in Maryville, TN.  I type in my ZIP Code, and I type in "weather," and it tells me the weather. 

That is about how easy this is. A majority of the retailers that sell over the Internet today collect the sales tax when they make the sale, so it can't be not only impossible to do, but it is not hard to do.

Then there are some who say conservatives aren't for this.  One of the leading proponents of this legislation is the chairman of the American Conservative Union, Al Cardenas.  He sent out an e-mail last week, and he sent out another one today.  Dear Senator:  As you continue work next week on the Marketplace Fairness Act, I would like to call your attention to what conservatives are saying about this issue.  They recognize as I do that it is not the role of government to pick winners and losers in the marketplace by requiring brick-and-mortar stores to charge a sales tax while exempting Internet sales.

Sincerely, Al Cardenas, Chairman, American Conservative Union.

He included in his e-mail -- I received this e-mail -- the comments of Charles Krauthammer, a conservative if there ever was one. 

“The real issue here is the fairness argument -- that if you're an old-fashioned store, you have to have your customers and you pay the sales tax and online you don't...So I think you want to have something that will level the playing field.  You can do it one of two ways.  You abolish all sales tax for real stores and nobody pays.  Or you get the Internet people to pay the sales tax as well.  I think the second one is the only way to do it, obviously.” 

Representative Paul Ryan -- he was home this past week too.  He was in Janesville, Wisconsin.  He is a pretty good conservative, last time I checked.  I don't go around making a list of who is a good conservative and who is a bad one.  I just think most people in America think of Paul Ryan as a conservative, just as the chairman of the American Conservation Union does. 

Representative Paul Ryan: 

“To me, I think the concept is right...It's only fair that the local brick-and-mortar retailer be treated the same as the big-box online sales company out-of-state.”

Lest one think the chairman of the American Conservative Union and Charles Krauthammer and Paul Ryan are all on another planet somewhere, here are a few other conservatives who agree with him:  William F. Buckley before he died wrote extensively about this; Republican Governors Bob McDonnell, Chris Christie, Robert Bentley, Paul LePage, Bill Haslam, Butch Otter, Terry Branstad, Rick Snyder, Mike Pence, Tom Corbett, and Dennis Daugaard of South Dakota. 

This is common sense.  This is fairness.  This is states’ rights. 

For the life of me, as a former governor, I do not understand how Congress can say to the conservative Republican governor of Tennessee, the conservative lieutenant governor of Tennessee, to the conservative supermajority Republican legislature:  You have to play "Mother, may I?" with Washington, DC.  We don't trust you to make decisions about your own tax policy. We think Washington does a better job.

That is laughable.  That is just laughable.

What we are doing with this bill -- and I will conclude with this -- is very simple.  It is two words: states’ rights.  It allows our State of Tennessee, our governor and legislature, to make a decision: Will they decide to require out-of-state sellers to do the very same thing they require in-state sellers to do; that is, collect the sales tax when they sell an item and remit it to the state government?  It is a tax that is already owed.  It is not a tax on the Internet.  It is a tax some people are paying and other people aren't even though they owe it.  It discriminates against mom and pop small businesses. 

This bill only applies to large retailers -- those that sell more than $1 million in remote sales each year. 

To the charge that it is too complicated, how could it be too complicated if a majority of Internet sales being made today already collect the sales tax? 

All we are saying is that the governor and the legislature may wish to say to all taxpayers:  If you owe the tax, you are going to need to pay it, and if you pay it, we can lower the tax rate for everybody in this state. 

I thank Senator Durbin and Senator Enzi for their leadership and bipartisan support.  I regret that we didn't have more amendments, but the opponents used as their tactic to try to kill the bill -- which I hope won't be successful -- their right to object to every amendment. We can't do much about that.

So after the bill passes, which I hope it does tonight, the House will consider it, and I am sure they will come up with their version of the bill, and we can go to conference and we can pass the Marketplace Fairness Act, a states’ rights bill that, in my view, is exactly what conservatives hope would happen.