Marketplace Fairness Act Update

May 16, 2013 by Paul Byrne

Business Environment

Razoyo has been encouraging merchants to fight against the Marketplace Fairness Act.  The senate has passed the act without any amendments. The house has yet to consider the bill. We’re hoping you will continue to support the cause by contacting your House Representative.

Before the Senate vote, I reached out to Senator John Cornyn. I am proud to say that he stood by the small merchant. He recently sent an email out to those who contacted him regarding the issue explaining his position. I couldn’t put it any better, so, I’m quoting him here.

Letter from Senator Jon Cornyn

Dear Friend:
Thank you for contacting me regarding Internet commerce and state and local taxes.  I appreciate having the benefit of your comments on these matters.

According to the United States Census Bureau, $3.9 trillion worth of retail and wholesale transactions took place on the Internet in 2011.  It is important that the federal government does not over-regulate or over-tax e-commerce, especially at a time when unemployment remains high and small businesses are struggling to create jobs.  Congress must ensure that taxpayers are not subjected to multiple taxes and needless complexity.

However, since the passage of the Internet Tax Freedom Act Amendments Act of 2007 (P.L. 110-108), which established a temporary moratorium on multiple and discriminatory taxes of e-commerce, a number of legislative proposals have been introduced that would affect state and local policies.  Most recently, the Senate passed the Marketplace Fairness Act (S. 743) on May 6, 2013, which would grant states the authority to compel certain out-of-state vendors to collect taxes on sales made to their residents.  

I could not support S. 743.  While I understand the view of many Texans that there is a need to level the playing field between online retailers and brick and mortar retailers, I have concerns regarding the costs, complexity, and administrative burdens this legislation would impose on small businesses and its overall impact on the economy and job creation.  At a time when millions of Americans remain out of work, small businesses should be spending their time and resources creating jobs, not cutting through miles of burdensome red tape.  Congress should focus on enacting low-tax, commonsense policies that promote economic growth, entrepreneurship, and private-sector job creation.

In addition, S. 743 raises fundamental constitutional questions related to federalism and state sovereignty by allowing states to collect taxes from out-of-state vendors.  These issues deserve careful consideration.  As a result, I am concerned that the Senate Finance Committee, which has jurisdiction over this matter, was not allowed to hold a full hearing and debate on this legislation.  Instead, the Majority Leader rushed the bill through the Senate without a full and complete debate and amendment process.  For these reasons, I voted against allowing S. 743 to bypass normal Senate procedure, and I could not support passage of this legislation.

I am honored to represent Texas in the United States Senate, and you may be certain that I will keep your views in mind as Congress considers legislation affecting state and local tax policies during the 113th Congress.  Thank you for taking the time to contact me.


United States Senator

Subscribe to our newsletter for regular community updates, case studies, and more.