LVN Editorial: Marketplace Fairness Act levels playing field for local government
April 30, 2013
In one week, the U.S. Senate is scheduled to vote on the proposed Marketplace Fairness Act, which gives states the ability to collect sales tax on goods sold on the Internet.
This only affects businesses that sell more than $1 million a year. States would also be required to provide merchants with free software to assist them with the collection of taxes for more than 9,000 local, county and state agencies.
Politicians on the both aisles of Congress and in the statehouses are split on the bill. In Nevada, for example, many state Republican lawmakers, including Gov. Brian Sandoval, support the act, while Sen. Dean Heller and Congressman Joe Heck said in 2012 they both opposed the act.
In the House of Representatives, Congressman Mark Amodei from Congressional District 2 is a co-sponsor of HR 684, the Marketplace Fairness Act.
State governments including Nevada have been losing millions — if not billions — of dollars from the Internet sales, in which many businesses lower prices and do not assess tax. For the merchants in Nevada and other states, this revenue loss is tremendous.
Nevada, for example, assesses a sales tax as do 44 other states and the District of Columbia. This fairness act is not intended to increase taxes; rather, it is to allow states to collect their fair share in a competitive marketplace.
According to Amodei's congressional office, "This legislation is about facilitating compliance of existing sales tax. This would not grant states or any authority the ability to tax access to the Web, clouds, or securities transactions. The bill explicitly prohibits states from trying to impose new levies on products or services that are not now taxed."
Both Walmart and Amazon favor the fairness act as do several major national retail associations.
Churchill County Comptroller Alan Kalt echoes the common tune of fairness in this act. During the past five years, he has seen a portion of the county's monthly and annual taxable sales take a 3-5 percent hit because of online shopping.
By assessing a 5 percent penalty on taxable sales due to online shopping, Churchill County has lost $11 million through February since the fiscal year began in July. The county lost $1.1 million in February, normally one of the slowest months for tax revenue.
The state also lost big, losing $1.4 billion from July to February, and $16.7 million in February.
With state numbers like these, the Nevada Legislature would not have to agonize over draconian cuts to key programs and would not look at legislation to assess, for example, additional mining taxes.
Overall, we do not look at the Marketplace Fairness Act as new taxes; it gives state and local municipalities their rightful share of money that should also be earmarked to them in a competitive environment; the passage of this act is long overdue.
Furthermore, we need to point out to those few opposing representatives from Nevada's congressional delegation that the people of Nevada did not vote for tax slasher Grover Norquist or the Heritage Foundation to represent them. Passage of this fairness act will help both state and local governments as well as the local businessman. Isn't that what Republicans have been harping on for years?
Editorials written by the LVN Editorial Board appear on Wednesdays.