Urging Enactment of the Marketplace Fairness Act
Adopted at the 82nd Annual Meeting in 2014
WHEREAS, in the 1967 Bellas Hess and 1992 Quill decisions, the Supreme Court ruled that, absent specific congressional authorization, state and local governments states do not have the authority to require the collection of sales tax by businesses that have no physical presence or nexus in the state; and
WHEREAS, in those decisions several Justices indicate that Congress can and should remedy this situation; and
WHEREAS, the growth of Internet retail has considerably magnified the impact of Bellas Hess and Quill; and
WHEREAS, current law results in billions of dollars in uncollected sales tax and gives an unfair advantage to remote retailers over owners of brick-and-mortar businesses located in our nation s cities; and
WHEREAS, the lack of fair competition is impacting local retailers and the commercial real estate market; and
WHEREAS, a University of Tennessee study estimates that the inability to collect sales tax from remote retailers costs state and local governments $23 billion in lost revenue in 2012; and
WHEREAS, the constraints imposed by the Supreme Court decisions threaten the future viability of the sales tax as a revenue source for states and local governments in this changing market for consumer goods and services; and
WHEREAS, authorizing remote sales and use tax collection will: Allow state and local governments to collect taxes rightfully owed, Reduce the probability that new taxes or higher taxes will be needed to balance state and local budgets, and Ensure a balanced playing field for local retailers.
WHEREAS, last year the Senate passed the Marketplace Fairness Act (S 743) with a large bipartisan majority; and
WHEREAS, S 743 would grant states the authority to require retailers, regardless of nexus, to collect state and local government sales tax; and
WHEREAS, S 743 would require remote retailers to collect sales tax pursuant to the application destination rate, defined as the sum of the applicable state rate and any applicable rate for the local jurisdiction (local sales tax or local option sales tax) into which the sale is made; and
WHEREAS, S 743 would exempt retailers with less than $1 million in remotes sales annually; and
WHEREAS, S 743 would create fair competition between brick-and-mortar and remote retailers; and
WHEREAS, S 743 would provide fiscal relief for state and local governments without affecting the federal budget; and
WHEREAS, until Congress enacts legislation to permit state and local governments to require the collection of sales tax, state and local governments will not be able to close the sales tax revenue gap between what is owed on out-of-state remote transactions, and what is currently collected; and
WHEREAS, S 743 is the product of years of hearings, negotiations and debate on this issue and reflects a bipartisan, bicameral agreement on how Congress should address this issue.
NOW, THEREFORE, BE IT RESOLVED, that The United States Conference of Mayors thanks Senators Reid, Alexander, Durbin and Enzi for their bipartisan leadership to garner passage of S 743 in the Senate; and BE IT FURTHER RESOLVED, that The United States Conference of Mayors urges the House of Representatives to take up and pass S 743 so as to conclude Congressional action on the Marketplace Fairness Act this year.