Max Baucus

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I objected to the last amendment for a very simple reason. The author of the amendment is making my case. This amendment makes my case. What is my case? My case is this bill should go to committee. It has so many problems, unthought-through, unintended consequences. This amendment recognizes that. This amendment says delay; delay for a year. Why delay? Because there are so many problems, because there are so many problems. The way to solve the problem is for us to deal with the problem in committee. That is the solution. I have made that point many times, many different places: the floor of the Senate, different private meetings. Finally, people are starting to realize all of their problems with this bill. Slowly they are starting to read it. Slowly they are starting to think about it. Slowly it is starting to sink in: Oh, my gosh, I did not think of that. Oh, that problem too affects businesses, not just businesses in nonsales-tax States, businesses across the country, all cross the country. This amendment makes my case. This amendment seeking a 1-year delay makes my case that there must be problems; we have to delay this bill. That is the basic reason I think we should not pass this bill. We should send it to the committee. I pledge to Members, my colleagues, my friends, the Finance Committee, which I chair, will hold a markup on this bill in the next work period. I made that pledge. I made that pledge. We can work on all of the problems this bill creates and solve them the best we can during the markup. I have heard no good reason we should not go to the committee. This bill was placed straight on the floor calendar, no committee consideration, none whatsoever--none. The Committee of jurisdiction had no opportunity to look at this bill, none. I think it should, especially when I make a pledge that we will mark it up in the next work period after this next recess. What reasons have I heard why we should not do that? I have heard none whatsoever. All the reasons I have heard are: Well, gee, Senator, we asked to do this a while ago, several months ago. That is no answer. I say now we will do it. I, for the life of me, can't understand why we don't solve this in the right forum. The right forum is the committee of jurisdiction. We can't do this on the Senate floor without hearings, without consideration. Senators who have been here a couple of years know the good legislation we have passed around here is legislation from the committee, where staffs go over all the different amendments and they work things out. The Senators work things out, and they try to find compromises, solutions, not for the first time on the floor when the Senators make speeches. They don't think and look for solutions on the floor of the Senate. They just make speeches. I am suggesting the good place we don't make speeches is in the committee of jurisdiction, the Finance Committee, where we can work out some of these problems. That is the reason I have been objecting and will continue to object. This is a travesty, the way this bill is being considered in the Senate.

Mr. BAUCUS. First, I want to deeply thank my two colleagues who previously spoke, Senator Collins of Maine and Senator Alexander of Tennessee, for their nice, warm compliments. I deeply appreciate that. It means a lot to me because they are both very fine Senators. They are terrific, as a matter of fact. A couple of points to clear the record. Senator Collins said Senator Enzi has been working on this bill for about a decade. That is not accurate. There was an earlier bill called the streamline act, or something like that. I have forgotten what it was. It was an attempt at a compact among States to address this issue. They worked on it and worked on it and worked on it for close to a decade and then couldn't agree. I think 24 States agreed, the remaining States did not agree, so that was the end of that. This bill is to ram through what other States would not agree to and to try to find ``the lowest common denominator.'' That is basically what this bill is, a new bill. This bill has had, to my knowledge, no vetting at all by any committee in any significant way. This bill has been referred to the Finance Committee. As the Senator from Tennessee points out, the Finance Committee has not reported out the bill. That is true. Frankly, we know one good reason why it hasn't is because we have been meeting very frequently at the staff levels. My staff of the Finance Committee with the staffs of those who are sponsors of the bill are working out different potential and actual complexities and problems of the bill. There have been a lot of meetings. I asked my staff, if someone were to be a fly on the wall, were those meetings in good faith? They were in good faith to try to find the answers to the questions. The answer is yes. That is their belief. There have been a lot of meetings to try to work out some of these problems which clearly exist. Obviously one big problem is represented by the amendment that has been--not offered but consent was asked that it could be offered, asking for a 9-month delay. I cannot think of any reason for a 9-month delay except to say, hey, 90 days isn't working. That is just an example of some of the problems and imperfections of this bill that could have been addressed in committee, and there are many of them. But, no, this bill didn't go to committee. I stand here again and tell the world, the Senate Finance Committee will report out this bill in the next work period if it has an opportunity to do so and work out all of these different problems, rather than trying to willy-nilly ram this through the floor and preventing changes from being corrected in a good, solid way. Let me make a prediction. Those who are for ramming this bill on the floor without letting it go to committee are doing themselves a disservice, because it makes it more likely this bill will not become law. If the proponents of this bill want this legislation to become law, what they should have done is say yes, let's go to the Finance Committee; the chairman of the Finance Committee has agreed to take it up; he has agreed publicly to markup, not just a hearing. We have had a hearing already. We would have a markup on this bill in the next work period. Then the differences would be worked out and some of the problems solved. Then the bill comes to the floor, and it will not be opposed, probably, at least not in the same way it is opposed now. Then it will more than likely be passed by the other body or at least worked through the other body. That is the better way to do it. This way, not going to committee and straight to the floor, reduces the probability that this bill is going to become law. I, frankly, am going to object to other amendments because I do not believe the proper way to do legislation is only on the floor and not go through the proper development in committee. I yield the floor.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I am happy the Senator from Oregon is objecting. I am not going to get into how many times the Senator from Illinois and anybody else wrote the Finance Committee to work on this bill. That is frankly irrelevant, and it is not a discussion that is worth getting into. It misses the whole point. The whole point is whether this is sound legislation. The whole point, in my judgment, is we should try to find a process where we do make this sound legislation. I think I am known around here as not somebody to unnecessarily hold up legislation. I have been here it will be close to 36 years, and that is not my style. That is not who I am. It is not in my DNA. I am someone who wants to work out things fairly, work both sides fairly but not stand and filibuster, not delay for the sake of delay or to try to get leverage. That is not what I do. I think, by and large, that is not very productive. I have said many times, and I will say it again, we can improve upon this bill if we would go to the Finance Committee and work on the bill the next work period and report the bill out. I have made that commitment; that the Finance Committee will have a markup on this legislation in the next work period and report it out so we can work on a lot of problems that are in this bill. There are a lot of them. One of the problems that comes to my mind--and I haven't had time to analyze it; nobody has had time to analyze it because there is no forum for it. Sure, Senator Enzi has worked on this for many years, but that was another provision. That was other legislation which States rejected because they couldn't reach agreement. So Senator Enzi found another solution, which is the bill he has introduced, and that has not ever been, to my knowledge, thoroughly examined in any committee. One of the problems I have is audits--out-of-State audits. Nothing in this bill protects States from an out-of-State audit which is oppressive in duration. This bill says there will only be a single audit. How long is a single audit? How many years is a single audit? How much pressure will an out-of-State taxing authority push on another State's seller--a single seller or a bunch of sellers? What is a single audit; a single audit for all the sellers in a State or a single audit per seller? This legislation doesn't say. What is the enforcement provision? What if a taxing authority from one State wants to go to another State, feeling that State is not living up to the provisions of this bill? What protection does that State have from an out-of-State taxing authority, an out-of-State audit? There is none here, but there could be. There could be protections if we go to committee and reasonably find a way to deal with this. Those are just some of the problems with this bill, and there are many others that have not really been thought through--many others. I have deep respect for Senators standing on the floor and pointing out their States are losing some revenue. I understand that argument. But most of those States don't go the next step. Most of those Senators don't go the next step. They have not read the bill. I have read it all. It is right here. It is 11 pages. As I have pointed out, with respect to audits, with respect to enforcement, there is no protection whatsoever. There are some nice wishful words in this bill, but when we stop to think about it, if someone is a small businessperson, they start asking a lot of questions. What does that out-of-State taxing authority do to me? What does it do to me, an out-of-State taxing authority? We are not talking about a Federal taxing authority. We are talking about an out-of-State taxing authority as it affects me as a seller in my home State. Whether you are a sales tax State is irrelevant. Let's take Massachusetts and a remote seller in the State of Massachusetts. Let's say, for example, some other State feels that remote seller in Massachusetts isn't properly adhering to the provisions of this bill. Let's say it is a California taxing authority and it goes to the remote seller in the State of Massachusetts and audits that remote seller and brings an enforcement action against that remote seller in the State of Massachusetts--I don't know--or if you are a nonsales tax State, such as the State of Oregon or Montana. There are a lot of questions. Frankly, I believe very strongly it makes much more sense for this legislation to go to the appropriate committee where we can work on it, especially when the committee has made a promise to report that bill out in the next work period. I grant you it will be a short period of time to work on it, during the next work period, but that is the compromise between those who want this bill up now--who want to ram it through, ram it through--with no significant committee consideration on the one hand and on the other hand having several weeks to work it out and report the bill to the floor. For that reason, I join my friend from Oregon in objecting to these amendments. We can't write the bill on the floor of the Senate. We have to go to committees where we can work things out. I yield the floor.

Mr. BAUCUS. Mr. President, I wish to ask the Senator from North Dakota a question. I guess I will ask the question through the Chair. Mr. President, I wonder if the Senator from North Dakota would tell me where in this bill--and I have read it--a State would have the authority to audit and bring enforcement action against a remote seller in any other country, such as China. Where in this bill does the State of North Dakota have the taxing authority to go to a remote seller in China that is selling goods in North Dakota? Where in the bill does it say that? What is the language in the bill which allows any State to bring enforcement action against a remote seller in any other country?

Mr. BAUCUS. Mr. President, I have another question. This is very similar to the context of this bill, and that is, I have asked the Senator from North Dakota many times to provide me with the authority for that proposition. I am wondering if the Senator from North Dakota could provide me the authority for that proposition rather than just asserting it. What is the authority? Is there a case? Is there a Federal law? Is there a Supreme Court case on that authority? I wish to know.

Mr. BAUCUS. The Senator just said the magic word. The Senator is talking about States where there is nexus. I ask for the proposition where there is no nexus. That is the whole point of a lot of this discussion here. The point in Quill is that in a State where there is no nexus, a sales tax cannot be enforced. Where there is nexus, it can be enforced. I will bet those cases the Senator cited have to do with whether a State is doing business in another State, and that is nexus. We are not talking about that here. We are talking about remote sellers where there is not nexus and not doing business in the State. Let's say there is a remote seller in China selling merchandise in North Dakota. I will bet dollars to doughnuts those cases have nothing to do with remote sellers generally. I will make a second point, that I think North Dakota will have a hard time enforcing the provisions of this bill in some province in China. Is North Dakota going to go to Hunan Province and have the Premier of Hunan Province enforce this? I doubt it. It is not just China, it is any other country. The Senator is confusing nexus from remote sellers, and that is not the point here. The point is remote sellers. That is just one of the problems of this bill when we start looking at it and start thinking about it and what is in it. That is why this bill should have gone to committee in the first place so we could correct it. One other point, and I don't think this is understood by very many Senators. This is not just a nonsales-tax issue, by any stretch of the imagination. For example, let's say two States--and they are both sales-tax States. There is a remote seller in one State--let's say Massachusetts--selling to a State such as California, and both have sales taxes. Under this legislation, California State taxing authority could audit the online seller in Massachusetts if it wants to and bring an action against that online seller in Massachusetts. So this applies to remote sellers in all States. This is not just nonsales-tax States but all States. This bill allows all States to bring enforcement actions and audit actions against remote sellers in any State. This bill does that. That is what it provides. This is not just a nonsales-tax State question. This is a question that affects all small businesses, all remote sellers all around the country in addition to the point I mentioned earlier--and I cannot for the life of me think any State can bring an enforcement action in many countries around the world where that remote seller does not have nexus in the State in question. This is another reason why this bill is fraught with problems and why it should have gone to committee in the first place. I yield the floor.

Mr. BAUCUS. Mr. President, I suggest the absence of a quorum.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, Senator Tester and I wish to recognize the 30th anniversary of the Maureen and Mike Mansfield Foundation. Nearly 30 years ago Congress passed legislation authorizing funds for a foundation honoring Mike Mansfield. Mike was the pride of Montana, and represented the State in the U.S. Congress from his election to the House of Representatives in 1942 to his retirement from the Senate in 1977. Mike Mansfield once said he reached the height of his political aspirations when he was elected senator from Montana. Montanans remember him fondly as a national leader who put Montana first.

Mr. BAUCUS. Mike Mansfield was enamored with the Far East when he traveled there as a young United States Marine in the 1920s. This early experience shaped his outlook on the Pacific Basin and the world. He went on to teach East Asian history at the University of Montana, and was a leading expert on Asia while in Congress. He then continued his life of public service as U.S. Ambassador to Japan from 1977 to 1989. He and his wife Maureen shared a love for Asia and a commitment to building relationships that would support strong U.S.-Asia relations.

Mr. BAUCUS. For example, the Mike Mansfield Fellowship Program, a centerpiece of the Foundation's work, has been building a corps of U.S. Federal Government employees with Japan expertise since it was established by Congress in 1994. This program allows U.S. officials to gain practical experience working in the Japanese government. More than 100 Fellows representing 23 U.S. agencies and the U.S. Congress have entered the Fellowship Program since its establishment. The Foundation's other programs include: Exchanges that allow U.S. and Asian government officials, researchers and policy experts to explore best practices, expand their contacts, and gain expertise and experience. The many exchanges organized by the Foundation include Washington, D.C. visits for members of Japan's Diet, Korea's National Assembly, and the Chinese government. Policy dialogues that facilitate substantive discussions on complex U.S.-Asian issues including international trade, national security, the rule of law, energy and environmental challenges. Programs that identify and foster new generations of American Asia experts with the goal of strengthening dialogue, research, and cooperation between the United States and Asia into the future. Research and education initiatives, including support for the Maureen and Mike Mansfield Center at the University of Montana.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I would like to say a few words about the pending bill before us. This bill will hurt small businesses not just in Montana, New Hampshire, and Oregon--non-sales tax States--but all across the country. The bill will let one State go after businesses in another State. This bill could give any State the right to make businesses across the country collect sales taxes for that State when selling products online. Therefore, businesses could be forced to spend their time and money collecting taxes for States across the country with no benefit to them. I am repeating that this bill has not been through regular order. The Finance Committee has not had a chance to improve this bill or address the many unanswered questions about its provisions. The floor of the Senate is no place to try to improve upon the bill and make the bill work. Years of work have been put into the issue of State sales taxes, and I commend Senators Durbin and Enzi for it. Unfortunately, that work is not reflected in the bill on the floor today. For years, the concept of allowing States to require out-of-State sellers to collect sales taxes on their behalf was done through a compact known as the Streamlined Sales and Use Tax Agreement. After over a decade of work on streamlining, only 24 States adopted the required simplification measures. The remaining States refused to join the compact. Why? Because they didn't want to meet the requirements for simplification. To break the logjam, Senator Enzi introduced the Marketplace Fairness Act in November of 2011. This new bill is nothing like the streamline bill. They are totally different bills with different legislation. This new bill says a State can require out-of-State sellers to collect sales taxes on their behalf simply by meeting six or so simplification requirements. But these simplification requirements were ones chosen that the States could easily or already meet. They are window dressing. First, the bill says a State must provide software free of charge that calculates sales taxes due. What that means to the business owner is 45 different pieces of software. What kind of software is it going to be? Could it be a single Microsoft Excel file buried deep in a State's Web site? How would a business make this software workable? The bill does not say. Let's say a business thinks the software provided by a State isn't good enough--that it isn't workable. Now this business will be forced to go to court in that State and prove the State didn't meet the simplification requirements. What kind of fees--not to mention time--is that going to take? A business will have to purchase software or services from a private company to collect sales taxes owed for multiple States. This won't be free. Businesses will also have to pay for the ongoing service of collecting and filing taxes. Second, one of the most confusing issues a business ever faces with State tax issues is whether it has what is called nexus. In tax jargon, that means sufficient connection to the State. If the business has nexus, it has to collect sales taxes on sales into the State right now--whether or not this pending legislation is passed. This bill does nothing to solve the confusion on nexus. Even if it passes, businesses will still grapple with the issue of whether they have nexus in other States. Why does this matter? This matters because the bill sets up rules only for those out-of-State sellers with no nexus--termed the remote sellers. Does this sound complicated? It is. It is very complicated. This bill creates one set of rules for sellers that have nexus prior to the Marketplace Fairness Act, and another set of rules for remote sellers. What does the small business owner do who isn't sure where his business falls--into one category or the other? If you get it wrong, that business may be exposed to additional penalties. Third, even if the business is clearly a remote seller, the so-called simplification requirements are in no way simple. Streamline--that is the other legislation that was worked out between about 24 States--was book length. Here, instead, we have a bill that is only 11 pages. The bill's sponsors have thoroughly compromised with 100 different factions on this, and what they came up with may look simple on the outside but is total chaos underneath. Remember, too, a business still could be forced to file sales tax returns in 50 different jurisdictions. Some of these returns are due monthly. A business will be subject to all those different jurisdictions' definitions of what is or is not taxable. It varies by State. In addition, small businesses will be exposed to audit, collection, and enforcement by 50 different States. This bill carves out businesses with less than $1 million in remote sales. That threshold is too low. Retailers have notoriously low profit margins, and small businesses can easily surpass that threshold with sales. In committee we could actually look at data to see what makes sense. We could bring experts in to talk about what a real small seller exception should look like, rather than arbitrarily picking a number. I know Senator Durbin has invited Senators to come down to the floor and offer amendments. Other Senators are offering amendments on different State tax issues, such as the Internet Freedom Act. But the floor is not the right place to mark up a complicated statute, let alone tack additional legislation onto the bill. This bill needs to be reviewed in a comprehensive and thoughtful manner through regular order. I repeat: This bill is not thought through. It is bad for Montana, and it is bad for small businesses all across our country, and not just nonsales-tax States. Mr. President, I yield the floor.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, in 1787, Thomas Jefferson wrote a letter to George Washington in which he wrote ``Agriculture is our wisest pursuit, because it will in the end contribute most to real wealth, good morals, and happiness.'' Those words remain true for our farmers and ranchers today but they also ring true to for veterans who are returning from service and returning to the land. Our veteran unemployment rate is shameful, and it really hits home in rural States like Montana where so many folks volunteer for service. I believe we must think outside the box and look for ways to boost jobs for our veterans in everything we do. Which has me turning to the Farm bill. Today I, with my colleague Senator Johanns, have introduced the Agricultural Opportunities for Military Veterans Act which will help create new opportunities for our veteran populations hoping to become involved in farming and ranching. With over 45 percent of those who serve in the military coming from rural communities Congress must ensure our returning servicemembers have a variety of resources at their disposal. My bill will help boost veteran employment through the Farm bill. It would create a veteran preference in programs that make it cheaper and easier to institute best practices in farming and ranching. The bill also creates a new Military Liaison Office to assist veterans at the U.S. Department of Agriculture and expands outreach programs to help make sure veterans are aware of the resources available to them. I urge my colleagues to join myself and Senator Johanns in supporting veterans through our programs at the U.S. Department of Agriculture.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, in 1787, Thomas Jefferson wrote a letter to George Washington in which he wrote ``Agriculture is our wisest pursuit, because it will in the end contribute most to real wealth, good morals, and happiness.'' Those words remain true for our farmers and ranchers today but they also ring true to for veterans who are returning from service and returning to the land. Our veteran unemployment rate is shameful, and it really hits home in rural States like Montana where so many folks volunteer for service. I believe we must think outside the box and look for ways to boost jobs for our veterans in everything we do. Which has me turning to the Farm bill. Today I, with my colleague Senator Johanns, have introduced the Agricultural Opportunities for Military Veterans Act which will help create new opportunities for our veteran populations hoping to become involved in farming and ranching. With over 45 percent of those who serve in the military coming from rural communities Congress must ensure our returning servicemembers have a variety of resources at their disposal. My bill will help boost veteran employment through the Farm bill. It would create a veteran preference in programs that make it cheaper and easier to institute best practices in farming and ranching. The bill also creates a new Military Liaison Office to assist veterans at the U.S. Department of Agriculture and expands outreach programs to help make sure veterans are aware of the resources available to them. I urge my colleagues to join myself and Senator Johanns in supporting veterans through our programs at the U.S. Department of Agriculture.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise today to urge the Senate not to move forward on the Marketplace Fairness Act. This bill forces small businesses across the country to spend time and resources they should be using to create jobs, jumping through new bureaucratic hoops. In Montana it forces our small businesses to play tax collector for other States, with absolutely no benefit to them. Instead of slapping more redtape on our small businesses, we need to be supporting their work to create jobs and get our economy going. Let me be very clear. This bill is bad for business and bad for jobs. This bill is not ready for debate on the Senate floor. It has not been completely thought through and is full of unintended consequences that could seriously harm America's small businesses. Supporters of the Marketplace Fairness Act claim this bill would level the playing field between Main Street businesses and out-of-State businesses by forcing both to collect sales taxes from customers. The bill's sponsors claim this is fair. The reality, however, is this legislation is anything but fair to America's small businesses. This legislation doesn't help businesses expand and grow and hire more employees. Instead, it forces small businesses to hire expensive lawyers and accountants to deal with the burdensome paperwork and added complexity of tax rules and filings across multiple States. This is a big-box bill. This is not a downtown bill. Our vanishing downtowns are in crisis. We must find ways to revitalize Main Streets across America by supporting our small retailers. In doing so, we foster economic growth and job creation in our communities. Let me read just one of the hundreds of letters I have received from small business owners in Montana and across America who are opposed to this legislation: Dear Senator Baucus, at a time when the economy is just recovering, the pending Internet sales tax legislation will cost small business jobs, reduce consumer demand, [and] reduce e-commerce innovation. As you know, TicketPrinting.com is the largest private employer in Wheatland County. . . . We expect this legislation to cost 13-20 jobs in one of the poorest counties in the United States, where a job means everything. Rather than rewarding the thousands of small businesses for their innovation and our hard work, Congress will be taxing the job engine of the economy and reducing jobs across the nation. Sincerely, Lance Trebesch. There are mom-and-pop businesses such as Mr. Trebesch's across the country asking for our help. Unfortunately, this bill does not provide that help. It will not solve the challenges facing Main Street. Instead, the Marketplace Fairness Act only creates new challenges that will put many of America's small businesses at a disadvantage. This bill imposes additional burdens and compliance demands on businesses already weighed down by Federal and State tax systems that are too complex, too time consuming, and too costly to comply with. I encourage my colleagues to look at this bill very closely. It requires America's businesses to track thousands of different tax codes in 7,500 different jurisdictions if they do online business out of State. It will force small businesses to hire expensive accountants and implement costly systems to deal with the complexity of collecting sales tax on purchases made in other States. And who is policing all of this? The bill, as written, has no audit or enforcement protection. As a result, it opens small businesses to aggressive out-of-State tax collectors. States will be taxing businesses beyond their borders. This bill helps States target those businesses that are truly operating out of State and subjects them to the same broken, confusing State sales tax systems that are currently in place. Tell me, how does this grow our economy and how does this create jobs? The promise of simplification in the Marketplace Fairness Act is a ruse. First of all, they provide no simplification to the businesses that already collect sales taxes in multiple jurisdictions. Those businesses are not even considered in this bill. They are left out. Second, the bill offers no real simplification for the businesses that will now be required to collect sales taxes. It only adds complexity, with no resources for guidance. This bill does not streamline the 7,500 different tax rates. It does not require the States to agree on definitions of taxable and exempted products. Think about that for a moment. Each State and many cities and municipalities have different definitions of what is taxable and what products are exempt. They are all different. It does not establish standard requirements for electronic filing. Think of that for a moment, no standard requirements for electronic filing. It does not establish a central location for registration or filing. It does not offer uniform forms or paperwork. The list goes on and on. These are just a few of the problems this bill is going to create. Even more concerning, this bill does not establish one audit system for all States. Rather, businesses will be exposed to audit by all 50 States. So any State can decide at any time it wants to audit a business beyond its borders. This bill does not even establish any rules or procedures for dispute resolution. Got a problem with the tax collector in a State across the country? Good luck. You will have to work it out with that State's court system. The bill's sponsors tell us not to worry. They say that computer software can calculate the sales taxes owed, collect the money due, and file the reports with the States by linking to the seller's Web site. Is offering a business the chance to pay someone else to calculate their taxes for them what passes for simplification? And those software providers cannot protect the business from exposure to audit, collection, and enforcement by 50 different States. Still worried? Well, the bill's sponsors tell us they will exempt businesses that have $1 million or less in sales to other States where sales taxes are not being currently collected. Why this threshold? Studies show that the burden of sales taxes on the very smallest is the highest. It costs approximately 13 percent of the tax collected for these small sellers to comply. As a result, they are not profitable tax collectors for the States. And what about the businesses with $1,000,001 in sales? Are they somehow a more efficient tax collector? These are not just empty fears. Businesses call me, exasperated with current State law collection requirements. Last Friday I received a call from the director of a farmers cooperative. He explained that many States exempt farmers from sales tax on certain goods. But the laws vary greatly by State on what items qualify for exemptions. Businesses selling to farmers already spend a lot of time determining what qualifies for exemption and what does not. They spend even more time tracking exemption certificates. The director then went on to explain: If the Marketplace Fairness Act becomes law, it appears that a regional agribusiness, which might occasionally make Internet sales to farmers in states outside of its territory, would have to invest just as much time and effort into studying and complying with the sales tax laws of far-flung states, as it does in the half dozen states where it has facilities. The burden of such compliance would clearly outweigh the benefits of occasional sales. This legislation is ripe with unintended consequences. Let me give another example. A key loophole in this bill is that States get to decide what is and what is not taxable. A State could decide that stock trades are taxable goods or services. Then when that State's resident purchases shares through his broker, that Wall Street firm will be responsible for registering as a business for sales tax purposes, collecting the sales tax, and remitting the tax to the State. True, States have the authority to decide what is and isn't taxable--to date--even without this bill. But right now the only way to collect taxes on transactions with out-of-State businesses is through use taxes. If States could now require out-of-State businesses to collect on their behalf, there is an incentive to expand the items that are taxable. This bill is going to make it very desirable for States to start taxing and collecting on all sorts of services--not just the financial world but also on services provided by attorneys, architects, engineers, and accountants. One can only imagine. By not asking the States to do anything to simplify their system in return for the benefit of having out-of-State business collect taxes for them, we are giving a carte blanche to States to impose even more taxes on businesses. The act is also an abdication of the responsibility given to Congress under the Commerce Clause. We have the duty to recognize that the State sales tax systems are still too complicated and would burden interstate commerce if imposed on more businesses. The Finance Committee is committed to tackling these issues to provide real relief to America's families and small businesses. We have held more than 30 hearings on tax reform--including one specifically dedicated to State tax issues, such as the Marketplace Fairness Act. I have affirmed repeatedly to Senators Enzi and Durbin that the Finance Committee would work with them to mark up the bill in the next work period, and I stated that commitment a few moments ago personally to them.

Mr. BAUCUS. Mr. President, I ask unanimous consent to proceed for 2 more minutes.

Mr. BAUCUS. Circumventing the committee process allowed this bill to come to the floor full of so many unanswered questions. Avoiding the committee process quashes any chance to improve this bill. Evading the committee process denies the chance to provide a fair playing field among businesses and reduce the heavy burden imposed by State compliance. I know some may dismiss my concerns as coming from a non-sales-tax State. Granted, I am always proud to protect Montana businesses. But this is not a Montana-only issue, nor is it an issue just for States without sales taxes. Lance Trebesch of TicketPrinting.com and Main Street business owners across America show us that our interests are tied together. We need to stop burdening America's small businesses with more compliance costs and figure out ways to help them grow. I urge Members to vote against cloture. Do not give small businesses in our States more regulations and more risks with more unintended consequences that have not been addressed. Do not set our Main Street businesses up to be audited by other States' tax collectors. Give the members of the Finance Committee the opportunity to make this bill work and make it fair. I urge a vote against this motion so we can do so. I yield the floor.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, what is the parliamentary situation?

Mr. BAUCUS. Mr. President, I will take that 1 minute, please. This is pretty simple. This legislation is new and only recently introduced. It has never been vetted. Others have but not this legislation. This bill is fraught with all kinds of problems, some of which have already been enumerated on the floor. There are many unintended circumstances. The only right thing to do is to permit this to go back to the committee so the committee can take it up. As chairman of the committee, I have made that promise many times. We have already had hearings. We will have a markup on this bill in the next work period. A markup means there will be a vote. I stand here ready to abide by the vote. I submit right now that the majority of the Members of the committee maybe will let us work this thing. I don't know. But that is the process. That is what we should be doing, not just ramming this thing through, which is so complex. There are so many unintended consequences. Many of the consequences have been enumerated and not addressed but could be addressed and would be addressed in a proper committee forum. I yield the floor.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise to recognize a very important event that will be occurring this Sunday and Monday. About 90 World War II veterans from Montana will take part in the ``Big Sky Honor Flight,'' and come to Washington, D.C. to visit their monument--the WWII Memorial. Their trip is hosted by the Big Sky Honor Flight program. The mission is to recognize American Veterans for their sacrifices and achievements by flying them to Washington, D.C., to see their memorials at no cost. The program, which has already sent 184 Montana veterans to visit the memorials, is generously funded by businesses, student groups, and folks all across Montana. These veterans come from all parts of our great State, and while they are in Washington, they will see the WWII Memorial and other monuments, enjoy a banquet honoring their service to the country, and fly home the next day. This is a special two days for this group of heroes, but it is also a time to give thanks for the courage and sacrifice of all our veterans and servicemembers. It is a time to reflect on the sacrifices made by those who fought on the front in Europe, on the battlefields of Korea, in the jungles of Vietnam, the deserts of Iraq, and those who are currently fighting in the mountains of Afghanistan. We must not forget their sacrifices. I am so pleased I will be able to meet with these courageous Montanans. I ask the Senate to join me in welcoming these heroes to our Nation's capital this weekend. They are: Robert E Anderson, George P Ardelean, William Bakker, Lorraine F Blank, Roy Boettger, Charles E Brickman, Richard A Caruso, Edward B Campen, Roy F Cattrell, Robert W Cook, Donald P Culliton, Louis J Day, Roy S Dimond, Raymond V Drake, Marvin Duncan, Theodore E Eklund, Joseph Fahn, Everitt D Foust, Leo C Fowler, Robert M Frankforter, Colin Glasgow, Maurice Graham, Joseph Hartman, John Hepler, Rudolph Hergenrider, Russell S Hodge, Vance Holbrook, William C Howard, Amy Johnson, Robert C Johnston, Bruce D Jones, Jack Jurgens, Gertrude Kalan, Lester L Kath, Joseph C King III, Robert Kinyon, Gordon Kirkwood, Donald B Koeppen, Henry J Kornegay, Howard Largent, Raymond Leone, Robert L Lubbers, Pierre Mangen, Donald J Marshall, William Clayton, George R McMurray, Paul Milam, Irvin J Miller, William Mills, Richard Miner, Ruben F Oberlander, John M Richards, Ivory L Robinson, Gerald C Schlichenmayer, Kenneth Schneider, Ernest D Sells, Donald C Siers, George E Sexton, John St Germain, Paul Stengel, Harry K Stine, Myron J Stratton, Myron R Stutterheim, Kent T Swift, Margaret J Talmage, Everett V Tande, Agatha F Twist, James A Vick, Robert L Wagnitz, Robert E Willems, Andrew R Winter, William D Worth, Kenneth Baeth, Raymond A Bergstrom, James Kenaley, James J Bertrand, George A Moore, William Bug, Edgar E St John, Gordon P Slovarp, Donald Shay, Edmund M Bouchard, George L Schuyler, Elizabeth Riley, Raymond J Rae, Ralph Stone.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I rise today to recognize David J. Thatcher, a remarkable Montanan and American. On April 18, 1942, Thatcher was one of 80 Doolittle Raiders who carried out the first air raid on Japan during World War II. The unit was named for their commander, Lt. Col. Jimmy Doolittle, who planned and led the mission that dealt a devastating psychological blow to the Japanese Empire in the wake of the Pearl Harbor attacks. I ask my colleagues in the Senate to join me in honoring Mr. Thatcher and his comrades for their heroic deeds, carried out 71 years ago today. Staff Sergeant Thatcher was born on July 31, 1921 in Bridger, MT and entered the Army in December 1940. He volunteered for the secret mission that later became known as the Doolittle Raid and was assigned as an engineer/gunner to Crew 7 of the ``Ruptured Duck.'' On April 18, 1942, the Doolittle Raiders launched their B-25 bombers off the USS Hornet aircraft carrier, 250 miles further out than planned because they had been discovered by a Japanese fishing boat. During their approach to Tokyo, the crew of the ``Ruptured Duck'' spotted a formation of enemy planes, but because of their special training and unique flying tactics, the Japanese formation never detected the ``Ruptured Duck.'' Crew 7 successfully bombed the Nippon Steel Factory in Tokyo. Following their airstrikes, all 16 aircraft either ditched at sea or crash landed because they did not have enough fuel to make it to their intended landing sites on the Chinese mainland. The commander of Crew 7, LT T.W. Lawson, attempted to land the ``Ruptured Duck'' on a beach, but instead struck the water a quarter mile off the Chinese coastline. The crew was forced to swim to shore. Staff Sergeant Thatcher, the only member of Crew 7 who was unharmed, cared for the injured until the Chinese arrived to help. Sadly, 11 Doolittle Raiders were killed or captured by the Japanese during the raid but, remarkably, 69 of them were eventually rescued. Staff Sergeant Thatcher went on to serve in England and became an engineer/gunner on a B-26 for the invasion of North Africa. He was discharged from the service on July 11, 1945. For his gallantry in action during the raid on Japan, he received the Silver Star. He was also awarded the Distinguished Flying Cross and the Air Medal with four Oak Leaf Clusters, along with the Chinese Army, Navy, and Air Corps Medal, Class A, 1st Grade. Today, I would like to honor the four courageous Doolittle Raiders who remain with us: Richard E. Cole, Robert L. Hite, Edward J. Saylor and David J. Thatcher. Let us also take a moment to honor the 76 others who have passed. The success of the Doolittle Raid marked a turning point in the war. It provided a morale boost for the United States and it proved to the Japanese people that they were no longer invulnerable. The Doolittle Raiders have earned a hallowed place in our American history, and today I commend Mr. Thatcher and his comrades for their courage and sacrifice.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I will yield a couple minutes to myself. Different States have different regimes. Some States decide they want to have income tax. Other States have big property taxes. Other States say they want to have sales tax but not income tax. There are many States with no income tax and those States are States some people gravitate to because they do not want to pay State income taxes. But I think States should have the right to choose their own taxation system, and we should not pass legislation which tends to force a certain State taxation system on the others. That is what this legislation does. It basically forces all States to have sales taxes, whether they want one or not. In my State of Montana, sales tax is anathema. Nobody touches a sales tax. What this says is: OK. You can have a sales tax, eventually, in my State, because we don't have a sales tax, and, therefore, businesses in Montana don't collect sales tax, but they will have to collect tax on sales for other States. In effect, we are going to be forced to have one and we don't want one. We are going to fight it fiercely. Second, basically, the language says, I will read it to you, allowing States to `` . . . enforce State and local use tax laws and collect taxes already owed under State law on remote sales by the amounts provided in such legislation for those purposes. . . . '' Essentially, it says a person in California can use State law to enforce and collect--and audit even, probably--a businessperson in another State. I have never heard of this happening before. Just think of it. We are asking, and telling, and directing States to force law on another State, at least on another businessman in another State. I have never heard of this. This sets a terrible precedent. We don't want to do this. Next is the complexity of this thing. The authors of this have been working on this issue for 12 years, saying they have all these computer programs that can do it. We have never seen it. There is no indication that all the bugs, over thousands of jurisdictions in States and localities and municipalities--just put yourself in the position of a small businessperson trying to figure out what in the heck is the law in this jurisdiction. What about that? It is going to be changed this year or next year, changed in lots of jurisdictions all over the country. How are we going to deal with it? We are not going to be able to do it. It is just a maddeningly complex situation. I have lots of other points I wish to make later, but those are two. I believe it makes much more sense, with all the complexity in this thing, for the committee of jurisdiction, the Finance Committee. I disagree with my good friend from Tennessee. Of course it is a tax--not a State tax, not a payroll tax, it is a sales tax. It is a tax. We could easily deal with this in the Finance Committee. That is our jurisdiction. That is what we are supposed to be doing. Then he can deal with all these complexities that have not been addressed in this resolution. There are no protections in this resolution whatsoever. I reserve the remainder of my time. Mr. President, I yield 4 minutes to the Senator from New Hampshire to use in any way she wants.

Mr. BAUCUS. Mr. President, I think it is time for those on the other side to say a word or two.

Mr. BAUCUS. Mr. President, how much time is remaining on our side?

Mr. BAUCUS. Thank you. Mr. President, I yield 3 minutes to the Senator from Oregon. I might say that I yield 1 minute to the other Senator from Oregon as well. I urge the Senator not to use it all right now.

Mr. BAUCUS. Mr. President, I yield a couple of minutes to my colleague from Montana, Senator Tester. I understand Senator Ayotte is going to yield additional time.