The U.S. Senate has given America's traditional retail businesses — and the communities that count on them for jobs and tax revenue — the best hope in two decades that government won't forever discriminate against them in the Internet age. The Senate voted 69-27 Monday to grant states the right to collect sales tax from out-of-state vendors with revenue totaling more than $1 million annually. It's a reasonable compromise that would make sales taxes fairer, and the U.S. House should quickly concur and send the legislation to President Barack Obama, who supports it. Then Florida's Republican-led Legislature should stand for Florida businesses and stop the competitive advantage enjoyed by out-of-state operations.
Since before e-commerce, remote sellers have benefitted from a 1992 U.S. Supreme Court ruling that said Congress had not given states the authority to require sales tax collections across state lines. Back then, the only competition to bricks-and-mortar retailers were mail-order catalogs.
But the growth of e-commerce has made the need to modernize the tax code even clearer. Now traditional merchants report they are frequently used as showrooms for consumers who browse and then buy the product online, costing communities jobs and the sales tax revenue that pays for everything from police to public schools. In Florida, the lost sales tax revenue from e-commerce is estimated at $454 million annually and growing.
Yet the Florida Legislature has done nothing to encourage Congress. Year after year, bills that sought to have Florida join the Streamlined Sales and Tax Use Agreement, a multistate compact urging congressional action, have failed. Nor have leaders shown an interest in following the lead of other large states like New York, California and Texas that have forced compromises with Amazon.com and others.
While the Senate vote was bipartisan, Republican Sen. Marco Rubio illustrated again why Florida has failed to act. The former state House speaker voted against the bill and then issued a screed that sounded like antitax activist Grover Norquist, who is trying to marshal forces against the bill in the House. Rubio claimed the bill was nothing more than a "money grab" by states that "will crush small businesses."
Apparently, Rubio does not care that traditional Florida merchants have suffered for more than a decade under a competitive disadvantage. He does not recognize that their customers have been paying disproportionately more to support the government services enjoyed by all residents, including those who shop online. Nor did the senator acknowledge that the legislation would only apply to businesses with revenues higher than $1 million and that states would have to provide out-of-state vendors free software to aid in sales taxes collections.
Democratic Sen. Bill Nelson supported the Marketplace Fairness Act of 2013 along with 45 other Democrats, 21 Republicans and two independents. Now the U.S. House needs to stand for tax fairness, and then, Florida's Legislature. Carpetbaggers shouldn't get a free ride.