Marketplace Fairness Act

SALES TAX EQUITY

The Issue—Marketplace Fairness Act

In 2013, the U.S. Senate passed the Marketplace Fairness Act and the bill (H.R. 684) has gone to the House of Representatives. The House Judiciary Committee referred it to the Subcommittee on Regulatory Reform, Commercial and Antitrust Law.

If the Marketplace Fairness Act becomes law it would create a national, legal framework under which brick-and-mortar, remote, and online retailers would be treated equally. Right now, brick-and-mortar retailers collect and remit sales taxes to the states in which they do business while online and remote retailers collect and remit sales taxes only in their own state and in states where they have a physical presence, such as a warehouse or distribution center.

How it Affects You

According to the National Retail Federation (NRF), this inequality in sales tax collection results in an estimated $24 billion loss in sales taxes each year.

Under the proposed law, states that wish to enforce the collection of these taxes must simplify their sales tax laws and they have two options for doing so—they can join the 24 states that voluntarily adopted the simplified measures outlined in the Streamlined Sales and Use Tax Agreement (SSUTA) or they can meet the simplification mandates outlined in the bill.

The main objective of this bill is to give states the authority to collect these sales taxes—but only if they simplify their processes for retailers. Opponents of the bill purport they are against new taxes or raising taxes—this bill is neither. This is not a new tax; it is a bill to enforce the collection of existing taxes.

If signed into law, the bill would require remote retailers to collect and remit sales taxes wherever they do business, regardless of whether they have a physical presence in the state. Retailers with annual gross receipts in total U.S. remote sales under $1 million would be exempt.

Our Position

The North American Home Furnishings Association joins more than 200 businesses and organizations, including the National Retail Federation, Retail Industry Leaders Association, National Governors’ Association, National Conference of State Legislatures, National Association of Counties, National League of Cities, International Council of Shopping Centers, and Amazon.com, in support of the bill. Lawmakers need to hear from their constituents—the people and businesses this proposed law benefits. They need to know how this bill could make a difference in your community. Take Action.