Today Rep. Steve Womack (R-AR) and Rep. Jackie Speier (D-CA) introduced before Congress the Marketplace Equity Act (HR 3179), a bill that, like the Main Street Fairness Act, authorizes state to require all online retailers, regardless of location, to collect state sales tax.
The introduction of the Marketplace Equity Act is a sign that more and more legislators are becoming aware of the problems inherent in the fact that while bricks-and-mortar retailers have to collect sales tax, online retailers do not. We’re happy to see that Washington DC legislators are listening to state and local legislators—not to mention their constituents—and are working hard to offer possible solutions.
Although the Marketplace Equity Act differs in some details from the Main Street Fairness Act, the two bills have the same goal: to ensure that states can enforce existing sales tax laws in cyberspace by requiring online retailers to collect sales tax. The very fact that two bills with this goal exist emphatically demonstrates how much they are needed.
Communities need sales tax revenue to pay for schools, police, and libraries, and local businesses are at a disadvantage when they try to compete with online retailers that don’t have to collect sales tax. By allowing states to require online retailers to collect sales tax, the Marketplace Equity Act and the Main Street Fairness Act stand to return to states over $23 billion in uncollected sales tax. They will also create a level playing field for local retailers, which create three times as many jobs as online retailers.
We welcome Reps. Womack and Speier and their cosponsors to the fight to ensure that all retailers play by the same rules, and we look forward to working with them.