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MFA, Resurrected


Graphic reading, "Sales tax? Review order"

Updated, 4.14.2015: The text of the Marketplace Fairness Act of 2015 is available. See S 698.

Spring is close at hand, even though snow continues to fall upon the East Coast at an alarming rate. Spring brings rebirth. This year, it also brings the resurrection of the Marketplace Fairness Act (MFA).

Rumors that lawmakers behind the Marketplace Fairness Act of 2013 intend to introduce a version similar to the 2013 version came shortly after U.S. Supreme Court Justice Anthony Kennedy referenced the “continuing injustice” that states face when they are unable to impose sales tax on remote sales. Justice Kennedy shared his view on the matter in his concurring opinion with the Supreme Court’s recent ruling over Colorado’s use tax notification requirement. Read more here.

Now the Marketplace Fairness Act of 2015 has been drafted and is being considered.

The new legislation, introduced yesterday, is similar to the 2013 version. Both would grant states the right to collect sales tax from certain remote sellers. Many of the senators behind the 2015 version also sponsored MFA 2013. In announcing this year’s bill, they said the following:

  • “The Marketplace Fairness Act would put Main Street businesses on a level playing field with online retailers. In 2013, the Senate passed this bill with bipartisan support. It’s time to give states the right to enforce their own laws without having to get permission from Washington” (Sen. Enzi, R-WY).
  • “Businesses in Illinois a re looking for a level playing field. … I hope that in the 114th Congress we can do what’s right for businesses in Illinois and around the country” (Sen. Durbin, D-IL).
  • The Marketplace Fairness Act is about two words: states’ rights. … I don’t think we should have to play ‘Mother, may I?’ with the federal government when deciding to collect, or not collect, a state tax that is already owed” (Sen. Alexander, R-TN).
  • “For the past 22 years, small businesses have been waiting for Congress to act on this issue. … There is no reason out-of-state sellers should have a leg up over our in-state businesses just because those transactions occur remotely—states must have the option to fix policies that discriminate against locally based mom and pop shops” (Sen. Heitkamp, D-ND).

Past supporters of MFA 2013, such as the National League of Cities and the Internal Council of Shopping Centers, have already issued statements of support for MFA 2015. Past opponents have also been quick to voice their concerns. Steve Delbianco of NetChoice said, “It’s a changed Congress and a new year, but this Marketplace Fairness Act is the same old tired idea that stalled in the last Congress.”

Indeed, the bill is likely to face stiffer opposition in the Senate than did its predecessor. The MFA of 2013 was overwhelmingly approved by the Senate before it was shelved in the House. This time around, “[b]ackers of the measure face a more difficult path to even getting the bill passed in the Senate, now that the Republicans have taken control of the chamber” (The Hill). To garner more support for MFA 2015, “supporters could try once more to pair the online sales tax measure with an extension of the Internet Tax Freedom Act.”

The text of the bill is not yet available.

Read more about ecommerce and sales tax legislation. Then check out sales tax automation Software-as-a-Service, which facilitates transaction tax management for businesses in all states.

 


Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.