May 6, 2013

Senate Passes Marketplace Fairness Act

Sen. Whitehouse Strongly Supported Bill to Give Small Businesses an Even Playing Field

Washington, DC – The U.S. Senate today voted to approve the Marketplace Fairness Act by a bipartisan vote of 69 to 27.  U.S. Senator Sheldon Whitehouse (D-RI) was a cosponsor of the bill, which would help ensure that large web-based retailers play by the same rules as small businesses in Rhode Island and around the country.

Currently, businesses that sell goods in brick-and-mortar stores are required to collect state sales taxes at the point of sale.  However, if consumers purchase the same products from web-based retailers, the consumers are responsible for paying the sales tax when they file their yearly state tax return.  As a result, a large majority of these sales taxes go uncollected, costing states billions of dollars in lost revenue.  Rhode Island alone lost over $70 million in 2012 through uncollected taxes from internet sales.

“One of the most common arguments we hear in the Senate is that government should not pick winners and losers.  Unfortunately, our current tax laws are giving an unfair advantage to big internet retailers over local small businesses,” said Whitehouse.  “I’ve heard from Rhode Island small business owners who are fed up with this unfair tax loophole, and I’m proud that the Senate acted today to give them the even playing field they deserve.”

The Marketplace Fairness Act would not impose any new taxes.  It would simply allow states to require web-based retailers to collect sales tax, just as smaller brick-and-mortar businesses are already required to do.  A similar bill has been introduced by bipartisan sponsors in the House of Representatives.

Last month, Senator Whitehouse spoke on the Senate floor to argue in favor of this legislation, and shared the story of a local small business being hurt by the status quo.  His speech can be viewed here.


Press Contact

Meaghan McCabe, (202) 224-2921