Tax Analysts Blog

The Meaning of a Symbolic Vote

Posted on Mar 27, 2013

The days of tax-free shopping may be numbered. Well, if we were honest, there never were any tax-free shopping days (unless we’re talking about a sales tax holiday, which is horrible tax policy, but I digress). On March 22, the Senate took a symbolic vote on the Marketplace Fairness Act (MFA). The act would enable states to require online retailers to collect and remit sales tax on purchases made in the state regardless of whether the retailer had a physical presence in the state.

Despite the fact that several notable large retailers have given up the fight against requiring online retailers to collect sales tax, the MFA is still not universally supported and many in the state tax world have questioned whether the act would move in this Congress. And it still might not pass this year, but the vote last week suggested there might still be a chance.

Of course, the vote was not actually on the MFA, but rather on an amendment to the 2014 Budget Resolution. Nonetheless, MFA sponsor Sen. Mike Enzi (R-Wy.) used the vote as a way to show doubters that there is bipartisan support for the legislation. I’m not sure anyone really doubted that there was bipartisan support for the MFA, the question will be whether, during an actual vote, that support will be obvious. Senators are not required to vote in the same way they did for the “test” vote.

That said, a large majority (75-24) voted in favor of the MFA, giving supporters hope. But the opposition is still very active. The National Taxpayers Union has said the MFA is “just a way to unleash state tax collectors on the Internet.” In addition, small retailers are concerned about the cost and complexity of compliance. To that end, the NTU has said that enacting the MFA would “hit small businesses with major compliance headaches, overturn constitutional protections against harsh tax administration, and undermine state tax competition.”

Ultimately, the fate of the MFA is still up in the air, but the symbolic vote could be just the momentum it needs to finally move.

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