|Marketplace E-Fairness Update|
As Congress is now back in Washington for a brief "lame duck" session, it is important that Marketplace E-Fairness be one of their top priorities to be considered and signed into law. On behalf of the Four Hundred Sixty-Seven (467) member municipalities of the Oklahoma Municipal League (OML) this is the number One federal issue.
Marketplace Fairness is likely more important to cities and towns in Oklahoma than in any other state due to the fact that Oklahoma is the only state in which cities and towns do not receive ad valorem for general operations. This puts Oklahoma in a particularly difficult and unique situation causing municipalities to be almost exclusively reliant on sales tax revenue to fund city operations including police & fire, road maintenance, trash disposal and even economic development programs.
Originally introduced as S. 336, the federal legislation on Market Place Fairness Act (S 743) could come up for a vote as early as next week.
Senate Majority Leader Harry Reid (D-NV) has taken the first step to move the Marketplace Fairness Act (S 743) directly to the Senate floor, skipping the committee process. He filed a motion on Tuesday night to begin the process of putting the bill on the Senate calendar. The bill could come up for a vote as early as next week.
As you recall, last month, 75 senators voted for a non-binding budget resolution regarding allowing states to tax online purchases. Although the vote had no legal impact, it was an important demonstration of support for the proposal.
The Marketplace Fairness Act was introduced by Senators Mike Enzi (R-WY) Dick Durbin (D-IL) and Lamar Alexander (R-TN). It currently has 29 cosponsors.
Under current law, states can only collect sales tax from retailers that have a physical presence in their state. Consumers are responsible for reporting online purchases on their tax forms, where the sales tax would be accounted for, but few do.
The Marketplace Fairness Act would empower states to tax online purchases but would exempt small businesses that earn less than $1 million annually from out-of-state sales.
Please ask your Senators to support the Marketplace Fairness Act when it comes to the floor.
Sen. James Inhofe (202) 224-4721 or email@example.com
Sen. Tom Coburn (202) 224-5754 or Craig_smith@coburn.senate.gov
If you have any questions or receive any feedback from your U.S. Senators, please contact Carolyn Stager at 405-528-7515 or 800-324-6651 or by e-mail at firstname.lastname@example.org.
On March 22, the U.S. Senate passed the Marketplace Fairness amendment to the Senate Budget Resolution, 75 – 24, which demonstrates the widespread, bipartisan support for marketplace fairness. Based on numbers from the Oklahoma Tax Commission, $225 million is the total loss from all remote sources to state, municipal and county governments. Based on that number the loss to the state is approximately $121.5 million in 2012, municipalities about $85.5 million and counties about $18 million. Click here to read more.
OML Executive Director Carolyn Stager participated in a webinar today hosted by the National League of Cities along with the US Conference of Mayors and National Association of Counties to discuss the critical issue of ‘tax exempt municipal bonds’ which is being threatened in Congress.
Tax exempt municipal bonds are the single most important tool that local governments use for financing critical infrastructure. State and local governments financed more than $1.65 trillion of infrastructure over the last decade (2003-2012) through the tax exempt market.
There are different ideas being discussed by Congress one of which is full repeal of municipal tax exempt bonds (Simpson-Bowles Commission, 2010. The other idea is the White House Budget Proposal which places a 28% cap on municipal tax exemption and Senate Budget Resolution suggests the possibility of a cap being placed on tax expenditures, which could include the exemption for interest earned on municipal bonds.
There are multiple moving parts in the Senate, House and Administration. The good news is Representatives Lee Terry (R-NE) and Richard Neal (D-MA) have introduced House Resolution 112 which celebrates the importance of municipal bonds. They are looking for co-sponsors and we should encourage Oklahoma’s congressional delegation to sign on to this Resolution.
Last Thursday the Marketplace Fairness Act was introduced concurrently in both Houses of Congress. This critical legislation supports Main Street retailers by putting them on an equal footing with their online counterparts; it helps cities and towns by allowing them to collect all taxes owed and by providing an efficient mechanism for shoppers to pay their sales taxes. It is estimated that this bill will allow state and local governments to collect an estimated $23 billion in sales taxes on online sales. We need to make sure members of Congress, both new and old, know e-fairness is still an urgent priority for America’s businesses and communities. Please take a moment to send your members of Congress an email urging them to ensure the Marketplace Fairness Act passes in 2013.
As Internet shopping grows more popular, online retailers are competing shoulder-to shoulder with Main Street businesses. Oklahoma municipalities have struggled with the impact of online sales on city revenue and the ability to fund necessary municipal services for many years. As a collective voice for cities and towns, the Oklahoma Municipal League supports HB 1363 by Rep. Sears. The bill will close the loophole for out-of-state online companies by creating a definition for “physical presence” in Oklahoma. Click here to read more.
The International Council of Shopping Centers has launched some new tools and features to support the push for Marketplace Fairness in 2013. The Tweet Your Member of Congress tool on 21stCenturyRetail.org allows you to talk directly and publicly with your elected officials about the need to level the playing field for all retailers. 21st Century Retail is also now on Twitter. You can follow the issue (@efairness), check out ICSC tweets, retweet them and spread the word using #efairness. Don’t forget to visit 21stCenturyRetail.org for the latest news and information about the campaign. Let’s make sure we get Marketplace Fairness passed in 2013.
Thank you to those who were able to dial in for our call last Friday. For those who missed our first Main Street Leadership Council conference call, the update and summer planning discussion gave the team a valuable snapshot of our campaign and the tasks ahead. Click here for a summary.
SST Revenues (PDF) - This chart depicts sales tax revenues remitted to cities by the Oklahoma Tax Commission from retailers who are voluntarily remitting sales tax under the Streamlined Sales Tax agreement.
To: Oklahoma Retail Federation
From: Matt Robison
Date: March 7, 2012
Re: Passage of HB 2586
This afternoon, the Oklahoma House of Representatives FAILED TO PASS HB 2586 (Representative Ownbey/Senator Brinkley) which was an attempt to modify the definition of what constitutes a businesses "physical presence" in our state for the purposes of collecting and remitting sales/use taxes due on retail purchases. The title was stricken on the floor; however, the final vote was 41-43. Seventeen House members did not vote on the measure.
This measure attempts to clarify the process by which on-line only retailers must collect and remit Oklahoma taxes due on internet sales for products delivered to Oklahoma locations. Such taxes are already currently collected and remitted by those businesses physically located in the state.
The House author held the bill on a motion to reconsider. Bills must be out of the House of Origin by March 15th.
Vice President Government Affairs
The State Chamber of Oklahoma
Sales Tax Fairness Report: 2011 Recap and Forward Look for 2012
In 2011 there was a tremendous amount of activity on the sales tax fairness issue. The Main Street Fairness Act was introduced in July by Senator Dick Durbin (D-IL) and Congressman John Conyers (D-MI) in their respective chambers. In September what is best described as a “game changer” occurred when California’s Governor enacted the Amazon law. ICSC was involved in that effort, which included the promise by Amazon to walk from a multi-million dollar ballot referendum to repeal the law and a public pledge to work towards a federal solution. Click here to learn more.
MAIN STREET FAIRNESS PRESS CONFERENCE - Added September 23, 2011
In 2005, the State of Oklahoma was among the first of 24 states in the country to join the Streamlined Sales and Use Tax Agreement (SSUTA). The purpose of the agreement is to modernize and simplify the way sales and use tax are administered. Every year, the Oklahoma Tax Commission has to make legislative changes to the state statutes to stay in compliance with the Agreement.
With 24 states covering over 60% of the population, the federal government must now authorize the agreement in order for the SSUTA to be enacted. In the past, this issue has not been a top priority for Congress. Therefore, states and local government are losing out on much needed revenue while businesses in your community lose out on business to online retailers.
This summer US Senator Dick Durbin from Illinois and Congressmen Conyers from Michigan and Welch from Vermont introduced a bill known as the Main Street Fairness Act HR 2701 along with S 1452 to allow local Main Street retailers to compete against out-of-state internet sellers.
The Main Street Fairness Act will level the playing field for local businesses by ensuring that online retailers collect the same sales taxes that brick-and-mortar businesses do. It relieves the burden of the local taxpayer from having to report to the state tax departments the sales tax they owe for online purchases.
Under a Supreme Court ruling, known as the Quill decision, only retailers who had brick-and-mortar businesses in the states were required to collect taxes. This made it burdensome on the local taxpayers to have to report their internet purchase “use” taxes on their tax returns. It was also a disadvantage to local businesses because many consumers who make online purchases or shop from catalogs do so to avoid paying taxes to the state and local governments.
As a result of the Quill decision, District of Columbia and 44 other states worked with local governments and businesses to adopt a comprehensive and simplified tax system that became known as the Streamlined Sales and Use Tax Agreement. Quill made it necessary for Congress to authorize this Agreement. The Main Street Fairness Act does this while providing help for online retailers.
It is important for Congress to support the Main Street Fairness Act when it returns back to DC. Please contact the Oklahoma delegation and encourage them to support this bill. CLICK HERE and scroll down the page until you reach “Contact Your Elected Officials” to get OK Congressional information.
The Oklahoma Municipal League Legislative Committee and Board of Directors voted to support the concept and efforts of Main Street Fairness Act. This issue will be presented for ratification to the full membership at during the OML Annual Business Meeting at the OML Annual Conference in Tulsa on Thursday, September 15th. For more information about the Main Street Fairness Act, contact Missy Dean at email@example.com.
You can also CLICK HERE for additional information from the Alliance for Main Street Fairness-Oklahoma.
ICSC has created a Main Street Fairness website where you can find all the information you need — fact sheets, videos with an ecommerce sales tax expert and the latest news stories on the topic.