Last year, Sen. Lindsay Graham rightfully voted in favor of the Marketplace Fairness Act, a bipartisan bill that would provide retailers with a fair chance to compete with online sellers. There is a growing bipartisan call in the House to take similar action, and the Senate has once again made it a focus on Capitol Hill by introducing the Marketplace and Internet Tax Fairness Act last week.
Combining two critical issues, the new legislation will keep access to the Internet tax-free by limiting the ability of state and local governments to impose Internet access taxes for 10 years, while giving states the ability to enforce their sales tax laws on businesses selling to consumers located within their borders. This would afford South Carolina the opportunity to update our sales tax system to keep pace with our evolving retail marketplace and greatly boost our local economies and protect jobs.
For years, our local businesses have been downsizing and in many cases shutting their doors thanks to the decades-old loophole that gives online sellers at least a 6 percent price advantage. While the layman may believe e-fairness will bring about new taxes, the opposite is true. Online shopping is not tax-free.
South Carolina residents are actually required to file taxes not collected at the point of purchase, as part of their income tax returns. By not complying, many consumers risk unmet tax liabilities that can result in penalties and fines. It just makes sense that in a technologically advanced society such as ours these taxes should be automatically collected and remitted to the state by the seller — removing the burden from the customer and allowing business owners to compete fairly on product quality, service and price.
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The Marketplace and Internet Tax Fairness Act supports and protects small businesses, gives states the power to enforce their own sales tax laws and strengthens our free-enterprise system while preventing undue Internet access charges on consumers. This is a win-win piece of legislation. The future of U.S. entrepreneurship and the survival of our communities depend on its passage. I strongly urge Sen. Tim Scott to join his colleague, Sen. Graham, in supporting S.C. businesses by voting “yes” on the bill.
Chairman and Chief Executive Officer