NLC Calls on House of Representatives to Move Marketplace Fairness Act

September 16, 2013

By Lars Etzkorn

NLC is urging Congress to not lose sight of the Marketplace Fairness Act of 2013, H.R. 684, which allows states and local governments to require internet retailers to collect sales taxes owed to them. Though Congress is a busy right now with the budget, the debt ceiling and Syria, this important piece of legislation should not be dropped from the agenda. 

A little refresher on the issue: as a result of a 1992 Supreme Court ruling, Internet sellers are not required to charge local sales tax if they don’t have an actual storefront in the buyer’s state. The Court, however, stated that Congress had the authority to enact legislation overruling its decision. If passed, the Marketplace Fairness Act would simply give states and local governments the flexibility to collect the taxes owed to them from online purchases; it would not raise taxes or impose new ones.

NLC calls on local leaders to urge their Representatives to ask House Judiciary Committee Chairman Robert Goodlatte (R-VA) to hold a hearing on Marketplace so it can advance to the House floor.  The Senate passed the legislation in May with an overwhelming bipartisan vote, and President Obama has said he will sign it into law. 

Representative Goodlatte is expected any day to release a statement of principles he would like the bill to address. “I do not believe the Marketplace Fairness Act is sufficiently simplified yet,” Goodlatte said. “While it attempts to make tax collection simpler, it still has a long way to go.”

NLC stands ready to address any of his concerns. 

"We support adoption of Marketplace Fairness, which helps Main Street retailers by putting them on an equal footing with their online counterparts. The bill also gives back control to local governments over their own resources by removing another obstacle from Washington that prevents local governments from deciding what is best for their communities,” said Marie Lopez Rogers, president of NLC and mayor of Avondale, AZ.

“I think it continues to be a great, conservative piece of legislation. It certainly supports a free market system, free of any tax loopholes,” Representative Steve Womack (R-AK) and author of the House bill said recently.  “It certainly is fair to the local merchants, who have to compete on a playing field that just isn’t conducive to them staying in business.”

In addition to making main street retailers more competitive, sales tax from online purchases can provide funding for essential and much needed services such as infrastructure and public safety, without increasing the federal deficit.