WASHINGTON - A Republican lawmaker on Wednesday said that Congress should pass Internet sales tax legislation - a top priority and major revenue issue for many states.
"It's time that we act," said Rep. Steve Womack of Arkansas at a press conference at the U.S. Capitol held by state and local groups and retail groups. He added that there are a few days left in the lame-duck session of Congress, and that he is hopeful that congressional leadership will decide "the time is now to put this issue behind us once and for all."
Last year, the Senate passed the Marketplace Fairness Act, which would allow states to require out-of-state retailers, such as large online retailers, to collect sales taxes if the states simplify their sales tax laws. However, the bill stalled in the House. A spokesman for House Speaker John Boehner said last month that the speaker did not plan to move the bill forward this year.
Womack, who sponsored the House version of the MFA, said after he left the press conference that he has spoken with Boehner about the MFA and will continue to speak with him about it.
"We'd like an opportunity to bring it to the floor," he said.
Curt Bramble, president-elect of the National Conference of State Legislatures and president pro tem of the Utah Senate, said that NCSL has met with staff in Boehner's office, and it appears that Boehner does not want to move the specific bill passed by the Senate. However, that doesn't mean that there aren't members of Congress who are working on language that would be acceptable, Bramble added.
David Quam, deputy director of the National Governors Association, said that the most likely vehicle for the MFA and an extension of a moratorium on taxing Internet access would be legislation some members of Congress appear to have an interest in that would fund most federal departments and agencies for the rest of the federal fiscal year but provide only short-term funding for the Department of Homeland Security.
Sen. Mike Enzi, a Wyoming Republican and sponsor of the Senate bill, called on groups to help bust myths about the MFA. The bill is a "states' rights bill," not a new tax, the senator said. He also noted that the bill that passed the Senate includes an exemption for small sellers.
Right now, states can only require online retailers to collect sales taxes if the businesses have a physical presence in the state. Customers are still supposed to pay taxes on their online purchases, but they often do not do so, and this requirement tends not to be enforced.
Enzi said the sooner the MFA is passed, the better off retailers and governments will be. He said sales tax revenue is critical for state and local governments.
"I know that a lot of things are funded at the local level using that sales tax," Enzi said. "And the smaller the town, the more critical that sales tax is," he said.
Representatives of state and local groups also spoke about how passing the MFA would help governments.
Oklahoma City Mayor Mick Cornett said that if the MFA is passed, his city would be able to fund 100 new police officers a year.
The Internet sales tax issue is "affecting employment in our communities, and this is also affecting the bottom lines in our city halls across America," said Cornett, who is also the second vice president of the U.S. Conference of Mayors.
Bramble said that legislation was passed in Utah to put the new sales tax revenue that would be collected if the MFA passes in a restricted account, so that the money could be used to lower the tax rate. On the other hand, in Virginia, there would be a tax increase to handle transportation needs if the MFA isn't passed, he said.
