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Bipartisan E-Fairness Bills Introduced in House and Senate

On Thursday, April 27 two bills addressing the issue of online sales tax collection were introduced in the U.S. Congress. In the Senate, “The Marketplace Fairness Act,” (S. 976) was introduced, and in the House, “The Remote Transactions Parity Act” (H.R. 2193) was introduced. The bills will allow states to require tax collection from out-of-state online retailers. These bills do notcreate a new tax. This sales tax on online purchases should be reported and remitted when a person files their taxes each year, however many fail to do so. The legislation would address the 1992 U.S. Supreme Court ruling of Quill Corp. v. North Dakota, which found that a state could only collect sales tax from a retailer with a physical presence in that state.

Both pieces of legislation have significant bipartisan support and were reintroduced from the last congress.  S. 976 is cosponsored by Senators Lamar Alexander (R-TN), Mike Enzi (R-WY), Dick Durbin (D-IL), and Heidi Heitkamp (D-ND). In the House, H.R. 2193 is cosponsored by Representatives Kristi Noem (R-SD), Steve Womack (R-AR), Jason Chaffetz (R-UT), Steve Stivers (R-OH), Lou Barletta (R-PA), John Conyers (D-MI), Jackie Speier (D-CA), Peter Welch (D-VT), Suzan DelBene (D-WA), and David Cicilline (D-RI). As of May 1 there are 14 total cosponsors for the Senate bill and 10 cosponsors for the House bill.

Senator Enzi said in a Senate news release, “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.” Senator Durbin, a cosponsor of S. 976 said, “The Marketplace Fairness Act creates a level playing field and gives small business owners – our nation’s job creators – a real shot at success.”
IREM has long been a supporter of this legislation, taking the issue directly to Members of Congress. In addition, IREM is a member of the Marketplace Fairness Coalition to advocate for this important legislation’s passage.

There is a growing interest to see this issue resolved to allow states to collect sales tax from online retailers who do not have a storefront in a respective state. In 2017 alone, there have been legislative efforts in at least 15 states to address the issue. In a March report, conducted by the National Conference of State Legislatures and the International Council of Shopping Centers, an estimated $26 billion in sales and use taxes had gone uncollected in 2015.

IREM strongly urges Members of Congress to pass this very important legislation.