THE apparent enthusiasm in the U.S. Senate for the Marketplace Fairness Act, which passed on Monday 67-27, obscures the difficulty of getting a meaningful tax-reform bill through a gridlocked Congress.
The act simply requires online retailers to collect sales tax. Collection is simplified by the Streamlined Sales and Use Tax Agreement, which Washington and 43 other states have signed. It is not a new tax. And it is an acknowledgment that existing law — requiring online buyers to voluntarily report and pay sales tax — is absurdly out-of-date.
But after losing the argument in the Senate, the tax-absolutist element of the Republican party will be vigorously pounding on members in the House. Anti-tax crusader Grover Norquist has described the collection of online-sales taxes as a gift to cash-strapped states.
Washington, among the most sales-tax dependent states in the country, stands to collect $845 million per biennium if it passes.
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But that’s not some gift for bureaucrats — it’s the approximate cost of fully funded all-day universal kindergarten, plus fully funded student transportation, plus zero increases in college and university tuition. It’s a huge step toward full education funding, from age 3 to 23.
Norquist’s side lost the Senate debate because brick-and-mortar retailers rightly see the inequity of effectively exempting online competitors from sales-tax collection. Seattle-based Amazon.com, which has been pressured by states to collect sales taxes, joined the Main Street retailers.
Across town, Peter Aaron, owner of The Elliott Bay Book Company, sees the Marketplace Fairness Act as a leveling of the business-playing field. “It’s an issue of business fairness — that we compete under the same rules. It’s not only a good thing, it’s the right thing to do.”
Of the Washington delegation, Sens. Patty Murray and Maria Cantwell voted for it, and Reps. Suzan DelBene, Derek Kilmer, Rick Larsen and Adam Smith signed on as sponsors, and Reps. Denny Heck and Jim McDermott support it as well.
Herrera Beutler’s spokesman said she was undecided, and looking for feedback from her district. Reichert’s office did not call back.