US Senate Passes Marketplace Fairness Act

May, 2013 - Less than four weeks after the IREM and CCIM Institute Capitol Hill Visit, the U.S. Senate voted in favor of the Marketplace Fairness Act. In an unusual course of legislative action, Senate Majority Leader Harry Reid, D-Nev., filed a motion to bypass committee and brought the Marketplace Fairness Act to a vote. The Senate approved S. 743 (identical to S. 336) by a vote of 69-27 (with four not voting).

This is one small victory in a larger battle. The U.S. House will need to approve Marketplace Fairness legislation before anything is finalized. To be clear, this legislation is not a new tax. It paves the way for states to enforce collection of a tax that they are already owed. States that do not collect a sales and use tax (Alaska, Delaware, Montana, New Hampshire, and Oregon) will not experience any tax policy changes with this legislation.

IREM began lobbying for Internet sales tax fairness when it became clear that online retailers have an inequitable advantage in the marketplace. Consumers use brick-and-mortar storefronts as showrooms then place orders online for the same product, often with a reduced price tag without sales tax. It is estimated that states missed out on $23 billion in uncollected sales taxes in 2012. The legislation still needs to be approved by the U.S. House of Representatives in order to become law.  IREM will continue to monitor the House for any movement on the bill.