FMI Applauds Senate Vote on Marketplace Fairness Act that Supports Changing Retail Landscape

Food Marketing Institute (FMI) welcomed the U.S. Senate’s strong support of the Marketplace Fairness Act (S. 743). The legislation garnered 69 votes for final passage this evening and now moves to the House for action.

“The current state of inconsistent sales and use tax collection in the United States makes legislation like the Marketplace Fairness Act a necessity,” says Jennifer Hatcher, senior vice president of government and public affairs for FMI. “The bill simply makes it clear that states have the authority to require online retailers to collect sales and use taxes, as long as the state complies with simplification requirements designed to ease the burden of collection on retailers.”

As it stands now, there are two different sets of rules governing the collection of sales taxes – one for online and one for traditional brick and mortar retailers – ultimately creating an unbalanced, anti-competitive environment. While brick and mortar stores must collect state and local sales taxes, online operators cannot be required to collect these taxes unless they have a physical presence in the state. In certain states, this can give e-retailers nearly a 10% price advantage before any other competitive factors come into play. The Marketplace Fairness Act helps guarantee everyone is playing by the same rules.

Hatcher continued, “This legislation is about leveling the playing field for retail commerce and allowing states to collect what they’re already owed. Our most recent research suggests that over the next 10 years, online grocery orders will decrease overall in-store sales by 11 percent, so this legislation reflects and supports the changing retail landscape.

“We urge the House to take up and pass the Marketplace Fairness Act.”

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