May 05 2017
In 2013, Legislation Passed in Senate, But House Failed to Bring it up for a Vote for Three and a Half Years; Senator Has Been Leading the Charge to Empower States to Make their Own Tax Decisions Since Her Time as ND’s Tax Commissioner
WASHINGTON, D.C. – U.S. Senator Heidi Heitkamp reintroduced bipartisan legislation to give states the option of leveling the playing field for brick and mortar businesses in North Dakota and across the country or to continue allowing out-of-state internet retailers to conduct transactions without collecting sales tax owed.
Currently, out-of-state retailers have an unfair tax advantage over locally based businesses because they are not required to collect in-state sales taxes – simply because their transactions are done remotely. Currently, online companies are not required to collect and remit sales tax, and it’s up to consumers to calculate and send in the taxes they owe for goods bought on the Internet – which most people don’t do. Heitkamp’s Marketplace Fairness Act – which the Senate passed the last two Congresses, but the House of Representatives failed to take up – would close this discriminatory loophole in the tax code by allowing states to decide whether remote sellers should collect the same sales and use taxes local brick-and-mortar shops are required to collect instead of placing the burden of remitting state taxes on the customer.
According to recent estimates, North Dakota lost about $31.3 million from the lack of sales tax revenue on remote sales in 2012.
Since serving as North Dakota’s Tax Commissioner in the 1980s, Heitkamp has been leading the charge on fairer marketplace rules. In the Senate, Heitkamp has been working to empower states to decide whether to level the commercial playing field for local businesses – helping introduce and pass a Senate bill in 2013. She also helped reintroduce the bill in 2015 and this year.
“As we shop online more and more, small businesses across North Dakota that support good jobs and help grow our local economies lose out,” said Heitkamp. “These small businesses need every opportunity to compete fairly, and they shouldn’t have to close their doors because they lack a tax advantage online retailers have,” said Heitkamp. “Since serving as North Dakota’s Tax Commissioner, I’ve been working to level the playing field so mom and pop shops are not discriminated against through unfair tax policies. We can level the playing field for our local businesses by giving states the option to make sure the marketplace – online or in stores – is fair and that’s what my bill aims to do.”
In 1991, when Heitkamp was North Dakota’s Tax Commissioner, the State of North Dakota attempted to make catalog retailers collect and remit the sales tax the state and municipalities were owed on sales. The debate went all the way to the Supreme Court in the case Quill v. North Dakota, where it was found the U.S. Congress had the ultimate power to resolve the issue. Since then, the sharp increase in internet sales has sparked renewed interest from state and local governments in leveling the playing field for brick-and-mortar businesses and closing a gaping loophole in our tax system.