U.S. senators Lamar Alexander and Bob Corker announced their support this week for federal legislation that would allow states to collect sales taxes on items bought online and through catalogs.
“Currently, remote businesses do not have to collect sales taxes in the states they sell into, while brick-and-mortar businesses do, creating a price disadvantage,” said Alexander, a Tennessee Republican.
He said the Marketplace Fairness Act would grant states the option to require that remote businesses, such as those selling online or through catalogs, collect sales taxes on purchases within states’ borders. The U.S. Senate voted 74-20 on Monday to begin debating the legislation.
Alexander sponsored the legislation along with senators Mike Enzi, a Wyoming Republican, and Dick Durbin, an Illinois Democrat, and a bipartisan group of 26 other senators, including Sen. Bob Corker, who is also a Tennessee Republican, a press release said. It said Tennessee Gov. Bill Haslam also supports the legislation.
“This legislation boils down to two words: states’ rights,” Alexander said. “We ought to support states’ rights by letting Tennessee and other states decide whether they want to collect taxes that are already owed, and how to treat businesses fairly in the marketplace.”
“I think most Tennesseans would agree that we’re fortunate not to have a state income tax, and to help ensure that remains the case, it’s important our sales tax system works,” Corker said. “This is a states’ rights bill that gives states like Tennessee the ability to enforce existing state tax laws and collect sales taxes on online purchases if they choose. It also levels the playing field between local brick-and-mortar businesses, who have invested in the state and currently have to collect sales taxes, and online retailers who are sometimes out-of-state entities and do not have to collect the Tennessee sales tax.”