Letter to the House in Support of the Main Street Fairness Act
November 16, 2010
On behalf of the 3.2 million members of the National Education Association (NEA), we urge Congress to pass the Main Street Fairness Act (H.R. 5660). This important legislation will authorize states to collect sales and use taxes on goods and services sold by remote sellers.
States face an unprecedented fiscal crisis worsened because they have limited authority to collect taxes on sales into their states. As a result, schools, police, firefighters, health care, emergency responders, roads, public transportation, and parks are being deprived of critical revenues. These uncollected revenues could help offset growing budget gaps in almost every state – over $27 billion in much needed revenues is not being collected.
In most states, brick and mortar stores are placed at a competitive disadvantage because they must collect sales taxes while sellers located outside their states do not. The U.S. Supreme Court (Quill Corp. v. North Dakota) said that Congress has the authority to allow states to require remote sellers (a retailer that does not have a physical presence in a state) to collect taxes.
For ten years, states and businesses have been working to reduce the compliance burden by simplifying sales and use tax administration for all types of sellers. The result of this work is the Streamlined Sales and Use Tax Agreement. Key simplifications include state-level administration of all local sales taxes; greater uniformity in tax bases; use of easily accessible technology; error liability relief for sellers; establishment of a standard set of tax definitions; business-friendly system for tax remittances; and safeguards for consumer privacy. Twenty-four states have adopted the simplification measures in the Streamlined Sales and Use Tax Agreement. These states represent over 31 percent of the US population.
The Main Street Fairness Act will allow the forty-four states and the District of Columbia that collect sales tax to better address their fiscal shortfalls. It will not impact the Internet Tax Freedom Act, nor will it create any new, multiple or discriminatory taxes on electronic commerce.
We encourage your support for this important legislation.
Director of Government Relations
Manager of Federal Advocacy