Michael Enzi

Mr. ENZI

Mr. ENZI. Madam President, I wish to take a moment of the Senate's time to call your attention to the retirement of one of the true heroes of my home town of Gillette, WY. For 30 years our local basketball team, the Camels, has been coached by one of the finest high school coaches of all time--Mike Curry. Mike has been doing a good job for so long we thought he would be on the bench on the Camels' side of the court forever. That is why it took us all by surprise when Coach Curry decided to retire from coaching at the end of this past season. Over the years Coach Curry has been more than our coach--he's been a Wyoming tradition. Ask anyone who is a Camels fan who has been responsible for their success and every one will tell you our secret advantage has been the coaching ability and basketball knowledge of Coach Curry. His concern for each of his players, and his great love of Campbell County High School, has been evident for all the years of his service to the people of Gillette. It shows itself in the hearts of those he has coached and in the lives of those he has worked with as their teacher. He has always been one to lead by quiet but focused example and that important quality of his has made him a role model that has helped to provide guidance and direction to all those with whom he has worked. If you ask the members of all those championship teams that played for Coach Curry, they will tell you that they learned some important lessons from him that helped to shape their lives. Thanks to him they came to realize what high expectations, teamwork, making good, thoughtful decisions and refusing to ever give up on a goal can mean to the pursuit of a difficult challenge. Ask his current players and they will tell you what it has meant to play for Coach Curry and to receive the legacy of success from his past efforts that helped to get them inspired and motivated right from the start. They knew before they even made the team how successful Coach Curry's Camels had been and that made them ask more from themselves than anyone else would have ever thought was possible for them to achieve. Coach Curry is now ending a remarkable career. In 30 years he has collected 605 wins and 12 State titles. If we were to ask him which one was sweeter--the first win or the last--I have a feeling he would tell us that they were all special because each one was made possible by a team of young men committed to winning and to each other. For my family, we will always remember Coach Curry for the impact he had on our son, Brad. He also touched the rest of our family as we watched the Camels play for and learn from a very strong, steady coach. For the community of Gillette, we will always remember the key role Coach Curry played in strengthening Gillette's sense of community and increasing our sense of pride in our school and those who wore its colors. Congratulations and good luck, Coach Curry. You did a great job and you can now look back on your coaching career with the satisfaction that comes from a job well done. You can also look ahead to some new adventures as this chapter of your life comes to a close and you begin a new one. God bless.

Mr. ENZI

Mr. ENZI. Madam President, the Marketplace Fairness Act is about States' rights and giving States the right to decide to collect or not collect taxes that are already owed. Critics have claimed that we are creating a new Internet sales tax, that businesses would have to remit sales taxes to 9,600 different tax jurisdictions, and that today's software simply isn't capable of helping businesses collect sales tax. Nothing could be farther from the truth. On the issue of creating a new tax or imposing new taxes, we made it clear in section 3(d) of the legislation that nothing in the bill encourages a State to impose sales and use taxes on any goods or services not subject to taxation prior to the date of enactment. This includes imposing sales and use taxes on financial transactions or services and any other good or service that a State may be considering. We also made it clear that nothing in this legislation limits the existing authority of States to impose State and local sales and use tax on and collect such taxes directly from the purchaser. As a former mayor and State legislator, I strongly favor allowing States the authority to require sales and use tax collection from retailers on all sales for each State that chooses to do so. We need to implement a plan that will allow States to collect revenue using mechanisms already approved by their local leaders. I would like to ask my friend Senator Alexander to help me respond to some of these concerns because he has been vocal about States' rights and that this has nothing to do with taxing the Internet.

Mr. ENZI. Yes, we were deliberate by including language in the Marketplace Fairness Act to authorize States to require remote sellers to collect taxes that are already owed under current law. It was not our intention to urge States and localities to impose other taxes not associated with sales and use taxes. Another issue that my colleagues and I want to make clear is the reason we included language in the perfecting amendment recognizing tribal sovereignty. Tribes that have adopted sales taxes have the same concerns as States about the collection of taxes on remote sales. During the drafting and consideration of this legislative concept in 2005, Senator Byron Dorgan of North Dakota and I began working with the National Congress for American Indians and the National Governors' Association to find common ground to allow tribal governments the opportunity to participate in the Streamlined Sales and Use Tax Agreement, SSUTA. After 2 years of deliberation, tribal government legislative language was included in the Main Street Fairness Act bill introduction in 2007. Although not included in the introduced version of the Marketplace Fairness Act this year, tribal governments requested the ability to collect sales and use tax if they choose to participate in the alternative system, not the SSUTA. Those tribal governments who participate in a streamlined system would agree to the same rules as the States who participate in that system. At this time, the Senate bill includes tribal governments in the ``State'' definition. Although some may disagree, I do encourage my House colleagues working on the Marketplace Fairness Act to further review this specific policy issue when the bill is debated in the U.S. House of Representatives. This is a very important issue that Senator Heitkamp has experience with, and I would ask her to share her comments with our colleagues. I also want to say yet again how grateful, and lucky, we are to be working with Senator Heitkamp on this issue. She has been working to solve this problem for even longer than I have, and I want to ask her for her thoughts on the legislation.

Mr. ENZI

Mr. ENZI. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. ENZI

Mr. ENZI. Mr. President, I rise today to urge my colleagues to vote for the Marketplace Fairness Act in just over an hour or so from now. I have said many times over the past few weeks--and, in fact, I have been saying it for the past 12 years as I have worked on this issue, but it is worth repeating--this bill is about fairness. It is about leveling the playing field between the brick and mortar and online companies and it is about collecting a tax that is already due. It is not about raising taxes, taxing the Internet, or taxing Internet access. This bill in general, and this bill in particular, has grabbed the attention of Members of the Senate and their constituents back home. Unfortunately, the misinformation that is being disseminated by many has added confusion and anxiety about what the bill does and does not do. For example, the Americans For Tax Reform sent me a detailed letter last week asking many questions. It appears the letter was not meant to find resolution or a path forward with this issue but ultimately to confuse my colleagues prior to tonight's vote. Senator Alexander and I responded to the 16 questions in order to provide clarity for the organization and its members. Mr. President, I ask unanimous consent to have printed in the Record the two letters to which I just referred.

Mr. ENZI. I would encourage everyone to read the bill. It is short-- 11 pages. You don't see many like this. You can see through that; right? It is a bill you can read from beginning to end and you can understand what it does, which is very unusual for Washington. It is not like a lot of bills that simply make changes to other bills and require you get hold of those other bills and read them to figure out what is going on. This bill is straightforward. If a State meets the simplification requirements outlined in the bill, it may choose to require collection of sales taxes that are already due. Congress is not forcing States to do anything. And if States do act, they are collecting taxes already due by consumers-- folks such as you and me. One of the issues that received much attention while debating this bill the past few weeks is the issue on audits. There is some concern small businesses will be subjected to onerous and time-consuming audits by State and local governments if those governments start requiring they collect sales taxes on these remote sales. It is critical to keep in mind that sellers that have under $1 million in remote sales in 1 year are not required to collect and would not be subject to an audit from any out-of-State government. In order to obtain authority to require remote sellers to collect, and therefore even have the potential of being audited by remote governments, States either must join the Streamlined Sales Tax and Use Agreement--and I will refer to that as the Streamlined States--or they can simplify their tax structure by creating a single entity within the State responsible for all State and local taxes and use tax administration and audits; establishing a single audit statewide; limiting collection to a uniform State and local tax base; allowing a single sales and use tax return; and providing the program to figure the tax with no liability to the retailer and, therefore, no need for an audit. For States that join the Streamlined Sales Tax and Use Agreement, a remote business would only be subject to a single audit for participating streamlined States, eliminating the possibility of audits by local governments and the probability of an audit. For States that do not join the streamlined States but choose to participate in the alternative simplification system outlined in the bill, a business would also be limited to a single audit, per State, per year. Practically speaking, there is no possibility that streamlined States or non-streamlined States would ever be able to perform significant audits of remote sellers. Today, the States audit less than 1 percent of retailers inside their borders. Auditing remote sellers would require additional resources and travel and is simply not a realistic possibility. For audits that are performed under the new system, the Marketplace Fairness Act demands that States adopt uniform audit procedures which would simplify and reduce business administrative expenses. Sellers who use the certified sales tax administration software would either not be audited or would have limited scope audits to determine that the software was properly installed. In addition to the audit protection the Marketplace Fairness Act provides, participating States are required to establish and maintain an accessible database of geographically based tax rates and tax base information to make it easier for remote sellers to collect taxes. These states are also required to hold those sellers harmless for errors in the database. Compared to today's sales tax administration, where sellers are expected to research and comply with tax rate and tax base information and to understand jurisdictional boundaries without help from the state and local governments, the Marketplace Fairness Act dramatically reduces administrative burden and audit risk. Some opposed to this bill go so far as to say that this potential overreach of State and local governments will lead to taxation without representation. The Marketplace Fairness Act includes significant benefits for remote sellers, including limits on audits, liability protections, and tax and administrative simplification. The tax is imposed on the consumer by the State where they reside pursuant to tax rates and a tax base established by the State and local governments. This serves as the ultimate check on excessive taxation. Because this tax is imposed on the consumer, there is no danger of taxation without representation. Another concern raised by a few of my colleagues is that businesses will leave the United States, set up shop outside our borders, and sell into the United States, presumably only because of a sales tax collection requirement. It is important to note that States currently enforce collection of State taxes against foreign businesses with no physical presence in the United States, and have a number of methods to compel collection by foreign sellers, including liens, levies, and seizure of assets. The Marketplace Fairness Act treats foreign corporations the same as it does domestic corporations. All online retailers that make over $1 million in remote sales, regardless of where the retailer is located, must collect and remit sales tax to States that require it. I would say this. No one works on a bill such as this, works on it 12 years, as a popularity contest. You have to be doing what is right. I have listened to the people, talked to the people, and know this is something that is going to be necessary to keep Main Street in business so people will have the ability to go to the store and make a selection and try the goods, feel the goods, and know it is right and that retailer is not going to have to worry about the person using their iPhone to get the barcode and order it from somebody else because of a sales tax difference. That is what will keep Main Street viable and the downtowns making it look like there is a growing community. In conclusion, I thank everyone associated with this bill for their hard work and efforts in getting us to this point. I thank Senators Alexander, Durbin, and Heitkamp for their unwavering support of this bill and moving it forward in the Senate. I thank all of the cosponsors of the bill. I very much appreciate their support. I thank all the businesses, the trade groups, the constituents who provided constructive feedback as we have attempted to address, as best we can, all the concerns that have been raised. I thank all of the staff who have worked on this issue--on my staff, my legislative director Randi Reid. She has worked on this as long as I have. She is probably, on the Hill if not the country, the expert on marketplace fairness or any of the other titles this kind of bill may have had. I also thank my tax counsel, Eric Oman; Corey Tellez, Beth Cook, Dena Morris, Reema Dodin, MJ Kenny; Ben Garmisa on Senator Durbin's Staff; Allison Martin, Michael Merrell, and David Cleary on Senator Alexander's staff; Jillian Fitzpatrick on Senator Heitkamp's staff; and all of the staffs of the bill's cosponsors and all of the people in offices that have been taken into the process so we could get the process to work. It is always a team effort, and it takes more than ones who are just leading the effort. I know there are an immeasurable number of hours they have put in on this issue and I thank all of them for their hard work. I look forward to continuing to work with my House colleagues, Congressman Womack, Congresswoman Speier, Congressman Conyers, and Congressman Welch, as they push forward to the House passage of the Marketplace Fairness Act. I also thank Senator Durbin for all of his energy on this bill, the perspective he was able to bring to the bill and his tremendous ability to communicate the issues. I thank Senator Alexander. We were working on a much bigger bill until Senator Alexander lent some expertise to make this a much simpler one, one that is completely readable and only 11 pages. I think that covers most of the objections. There will be some from the States that do not charge a sales tax at all because if their businesses exceed $1 million in on-line sales, then they will have to. If they sell into States that collect the sales tax, they would have to participate in the collection of that. As we push forward with House passage of the Marketplace Fairness Act and as we finish in the Senate tonight, as I am confident we will, I thank all who are participating in it, particularly the people of courage. I yield the floor.

Mr. ENZI

Mr. ENZI. Mr. President, I thank all of the people who have participated, particularly Senator Durbin who has helped to coalesce things, Senator Alexander who came up with the idea for having a shorter bill, only 11 pages--never see it in the Senate--written in plain English, and it is States rights. This does not cause the Federal Government to do anything. What it allows is for the States to do what they have already passed laws on. I can see this from the standpoint of an individual. I know in Wyoming if you buy something on the Internet and you are not charged a tax, you are supposed to fill out a form and send it in. That is a difficult thing to do, hard to even keep track of. This will eliminate that problem of individuals wanting to pay the tax but not knowing exactly how to do it. I know it from the standpoint of a small businessman, if they had the experience of somebody coming in, trying on the goods, finding out exactly what they want, the color, the style, the feel, everything, and then ordering it on the Internet. The even more ironic part of it is when they have a problem with it, they bring it back to the local retailer to fix it. I have seen it from the standpoint of a mayor. I know in Wyoming at least 30 percent and up to 70 percent of the revenue of the municipalities comes from the sales tax. That is on a declining basis at the moment. That is not only what they run the city's streets and snow removal on; a lot of the police, the fire protection, even education is affected by the sales tax. I have seen it from the standpoint of a legislator as well. I know when we passed those taxes, we did not say: Okay, we want to discriminate against the local business that pays the property tax, hires people locally, and participates in all the community stuff. If you are out of State, we are going to let you off the hook. No legislator ever passed a bill like that. This is one that corrects all of those things and brings fairness to the marketplace. I think it will make a significant difference, particularly in communities where they will still be able to help out some of the charitable organizations and activities that would have to go by the wayside if this bill were not to pass. I look forward to working with people on the House side. I wish to thank Senator Durbin, Senator Alexander, and Senator Heitkamp, particularly, for all of their efforts on this bill. I thank Senator Heitkamp for her persistence over 22 years and knowing the intricacies of how it works on the Canadian border, as well as having been involved in the original case where the Supreme Court challenged us to fix this problem. Today we have a chance to fix this problem. I ask my colleagues to vote for the bill. I yield the floor.

Mr. ENZI

Mr. ENZI. I thank my friend from Maine, and wholeheartedly agree with her conclusion that we must ensure that the Marketplace Fairness Act is correctly implemented. I have spent many years working on this legislation and strongly believe that leveling the playing field for Main Street businesses is the right thing to do. We must implement the solution to that problem in a reasonable manner, and I agree with the Senator that the 1-year delay she proposes is appropriate to do this.

Mr. ENZI. I think both the proposals made by my friend from Maine are commonsense items that will improve the Marketplace Fairness Act. As this bill moves through the legislative process, I suggest my colleagues on both sides of the aisle--and in both Chambers--adopt a 1- year delay in implementation and prohibit States from beginning to exercise their new authority to require the collection of sales taxes during the holiday season.

Mr. ENZI

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

Mr. ENZI. Madam President, I wish to thank the Senator from North Dakota for her comments and her involvement for over 20 years. I feel like a newcomer, with just the 12 years I have been trying to get this passed. Wyoming has recognized the need for it and has had the desire for it. We were one of the first to join the streamlined sales tax effort, and I think we were joined by a number of our surrounding States. The purpose of that, of course, was to make it simpler so it would be easier for people to collect the tax. I wish to congratulate the Senators from Maine for putting forward what I consider to be kind of a phase-in part. Of course, there are a lot of people who would like to have it done a lot faster than that, but this would allow 1 year for people to get their program up and running. Part of that time would be taken by the free software that has to come from the States. It will take them a while to get that together, although everybody is hearing from eBay a little bit, and eBay already has one of those sales tax programs. It costs 15 bucks a month if you want to collect sales tax in the States, so it isn't like it is something impossible. I know L.L.Bean is going through a major computer switchover right now, so they know how difficult that is, and if it were compounded at the same time by having the sales tax collected, it could create some difficulties. In checking around, we have gotten the suggestion there be 1 year allowed before they had to start collecting the taxes. There is another small provision that says from October 31 through December 31 there wouldn't be a conversion because that is the Christmas season. In retail, that is the big season. If they can't concentrate on their customers at that point in time, they are not going to make their money. It makes the whole year just in those couple of months there. So there is an exclusion the program wouldn't go into effect during that period of time. So there is this kind of a phase-in for everybody to get everything ready. I know it is a lot more time than what States would like to have. They would like to begin collecting the taxes in 90 days, if they were able to get their program in place in 90 days. But we think that is reasonable. They brought that to the floor, but it was objected to even getting to debate it. So we don't get to vote on that. Around here a lot of times people say: It is a filibuster if you don't get to, and if there is cloture, then everybody ought to vote against cloture until everybody gets their amendments. How can you do your amendments if one person can object--and has. I think there would probably be three or four who would object, maybe six or eight who would object. But it is hard to do the amendments, and that should definitely not be the reason for anybody to vote against final cloture on this bill and get it enacted. Hopefully, we can still get some amendments through the process. Anything that is germane after cloture can still be voted on. I know there are a lot of proposals out there. Some of those proposals, of course, deal with something other than what would be germane to this bill. There would be major changes in the tax structure in other ways. We have tried to keep this to an 11-page bill. We tried to keep it simple, keep it to one topic. It is something anybody can read and understand. In fact, I don't remember a bill that has had language quite as clear. I thank the Senator from Tennessee, Mr. Alexander, for all his concentration. He looked at the 80-plus page bill we had, which had a lot more stuff in it, and said why don't we make this into a States rights bill. Once we took that approach to it, it made all the language much simpler. We just needed some basics for them to have to participate, and so that is why it is an 11-page bill. We will not see an 11-page bill come through here very often. I would guess some of the amendments being proposed--that have nothing to do with the collection of sales tax--are probably more extensive in pages than what this bill is. We are hoping people will stick to germane and relevant--or at least relevant; that is a little broader than germane, and we can do some amendments. But if there is going to be an objection--and I was just in a meeting where I was assured this is going to happen, and there is going to be an objection every time, no matter what the amendment is--I am very disappointed in that. I do want to point out there is a small seller exemption. If you are a retailer and you do less than $1 million of sales online during a year, you don't come under this bill. You don't do anything different than what you are doing right now. For a lot of small businesses, $1 million would be a lot of money. I have heard some proposals that maybe we go to $10 million or $20 million. That affects some big retailers that don't want to do it. But to small retailers, $1 million is a lot of sales when it is just the ones that are done online. We are not talking about their total sales--what they do in their stores. We are just talking about the ones where they put up their Web site and they get orders and they ship out those orders. If that exceeds $1 million, the next year they would have to start collecting it. So not only, with the Collins amendment, would there be 1 year built into the time before they would have to start doing it, there would also be another year before they would hit the $1 million, and if they do not hit the $1 million, then they have another year and another year and another year until they do. Of course, having been a small businessman, I am pulling for all of them to exceed $1 million. Most small businesses I know would be so tickled to hit $1 million they would think maybe this wouldn't be such a bad deal. This is definitely giving some emphasis to online sales. It is much easier now to get a Web site. In fact, the Small Business Administration has been going from State to State to State and providing people who will do free Web sites for people who attend a seminar on how to do online sales. I commend the Small Business Administration for doing that. I think it has helped a number of businesses that haven't been able to expand beyond the few thousand dollars they are selling in their own stores to increase their sales. We hope everybody gets to exceed $1 million. There is another part of that $1 million that is kind of interesting. If you are a nursery--and we heard an example of a nursery last night-- and you are doing big sales, the chances are pretty good some of those big sales are to other nurseries. If a product is sold to somebody else to be resold, there isn't a sales tax. So that wouldn't count in the $1 million. We did hear an example during the press conference of a contractor in a State and the other contractor got all his stuff online and from out of State and on a $150,000 contract was able to undercut him by 10 percent. It was just a $150,000 project--a category that small businessmen specialize in--but he was beat out by an out-of-State person who didn't pay sales tax on the products they were bringing into the State and using in construction. So we do have a small seller exemption. There is also simplification in the bill, and I would be happy to go through that. We haven't had any suggestions for more simplification, at least from those who understand what the simplification is. One of the reasons that is fairly simple now is because computers have come a long way. I don't know how many people here have purchased something online, but when you do, you put in your address where you want something shipped, and when you go over to see what the bill is going to be, not only will there be the price of the product, but there will be a sales tax. In a number of States, people have volunteered to collect it, and for the number of people who have volunteered to collect it, we really appreciate that. I cannot believe that Senator Collins' request to bring up an amendment that would allow a phase-in, that would give everybody extra time, would be objected to, but, as I said, when we checked we found out that everything is going to be objected to, which will bring us to a cloture vote. I yield the floor.

Mr. ENZI

Mr. ENZI. Mr. President, I appreciate the comments from the Senator from Oklahoma and have enjoyed working with him the entire time he has been here. He brings up a lot of important issues, part of which is the financial shape our country is in right now. I noticed his comment that we are the best-looking horse in the glue factory and so people are pouring money into the United States. I went to one of the bond issue auctions where we and some people from other countries were willing to take a negative interest rate in order to buy our bonds, which means they think we are the best hope there is out there. But that could change pretty quickly, and 5.88 percent is the average, which changes to $880 billion a year, which is a lot more than we spend on defense. So we need to be looking at some of those issues. It is difficult to get a bill up around here. It is difficult to get a vote on an amendment around here. I know, because I have been working on the bill that is on the floor for 12 years, hoping to get an opportunity on the floor. So I would love to give Senators all the amendments they want; I was just hoping their amendments might be relevant--not germane, necessarily, relevant--to what we are doing; that it would be something about the sales tax collection. Those ought to come up. But when amendments are brought up as a result of frustration because people haven't been able to bring them up before-- or some have even been brought up before and voted down--I would hope they would kind of constrain themselves on trying to make those an amendment to this bill. Yes, there ought to be an easier way to get things going around here, and I think that would be in kind of a bipartisan way. This is a bipartisan bill. It is even bicameral. We have Republicans and Democrats on the House end working with us, conferring with us, hopefully, so something can be done, and here, of course, it is Republicans and Democrats--more than half of the people--who are supporting this bill. As I said, I have worked for 12 years to get the bill to this point, and it usually gets blocked at the committee level. This time it didn't go to committee. I prefer bills to go to committee, but if we can't get them to committee and we get an opportunity to bring one up, we do. One of the difficulties we have here is there are a lot of things that have to be done in the Senate, there are a lot of things people want to have done in the Senate, and there are a lot of things that have tremendous appeal throughout the United States or at least among certain people. It is my understanding the next thing we are going to go to is water, and if my colleagues want to talk about a sensitive issue in the West, talk about water. My State gets an average of 16 inches--yes, that is right, just 16 inches--of rainfall a year. Other States get 16 inches in a month. We are considered high desert, and we are conscious of our water. So we will be interested in the water bill. Following that, I think, is the immigration bill which has gotten a lot of publicity. There are a lot of people working on it, and there are a lot of opinions that I think are actually being worked into some kind of a bill. Again, if we had a process where people could bring their bills up step by step, we could probably go through with a lot more. Because one of the complaints around here is bills often wind up to be a couple thousand pages long and it is hard to digest that. It is hard to bring the American people along on it. But the bill we are talking about here is an 11-page bill, and I think it is probably one of the most readable bills people have ever had to work on. An 11-page bill shouldn't probably take very long around here, but it takes just as long as any other bill. So I am hoping for this one chance we have to shore up some of the State, county, and town revenues, particularly since they are not going to be able to come to the Federal Government for money. In fact, the Federal Government is taking money away from them right now and is talking about even more ways of taking money away from the States, the towns, the counties, and the municipalities. What we did recently in that sequester bill is we took 5.3 percent out of the Federal Government's payment in lieu of taxes. They know they own properties in the States that, if they were in private hands, would result in property tax, but they are in the Federal Government's hands, and the States can't tax the Federal Government. But the Federal Government said, We know that is wrong, so we will pay a tax. The Federal Government decided what that tax would be and they don't raise it, so it has no relationship to the actual value of the property and what that property would raise if it were in private hands, which is why there are some appeals around here to sell off Federal property. But this year the Federal Government said, Well, yes, we owe that, and we haven't been increasing it so it is way below what the property tax ought to be, but we are going to cut you out of another 5.3 percent. I know people across America didn't have a choice of saving 5.3 percent of the money before sending it to the Federal Government, but the Federal Government is saying, For the taxes we owe, we are going to take 5.3 percent out of it first. So there are a lot of things there that are going to infringe on States and counties and municipalities. I used to be a mayor so I know what the money is going to be used for and I know an essential part of that comes from sales tax--in States that have sales tax--and in those States the property tax is usually pretty low. But if they continue to lose revenue on the remote sales that take their revenue away, they are going to have to probably raise some of those taxes. I know there is a desire to force them to reduce some tax in exchange for whatever tax they get from this, but they have been losing tax and they are going to be losing tax. This is a States rights bill. That is how we got it shortened down so much. The States actually have to take some action in order to be able to do this. I hope we don't try to dictate to the States what they do with whatever money they raise from this. But, again, that is a possibility on an amendment. I am sorry the Senator from Oklahoma isn't on the Finance Committee anymore because there is the possibility, as we are doing tax reform right now, to talk about a number of these things he brought up, including gamblers who get to deduct their losses and the 501(C)(6) corporations that are tax-free. We need to be talking about whether some of those things should be tax-free, what their purpose is, where the money goes, how much is in the private sector, and what it is used for. Of course, I have been on the Finance Committee and I have been going through these discussions on reforming the taxes, and every time we get into it, we think of a lot more things we could be spending money on. So sometimes we talk about raising the tax instead of making it fairer and simpler. The two things can actually be separate. The policy of how we spend the money is supposed to be appropriation and authorization from the committees. The committees say what they think the money ought to be spent on and then the appropriators are supposed to stay within those limits. But that isn't the way it exactly happens. If we are going to have fairer and simpler taxes, they are going to have to be fairer and simpler. I know Senator Wyden has a principle that is a one-pager. That would be nice, if it were only one page to fill out for our taxes. Of course, that means getting rid of a lot of things we have come to take as standard policy in our taxes. Again, a lot of those could be handled another way and they could be more forthright and more honest on what exactly we are doing, and probably fairer to the recipients of some of the tax expenditures we get. I appreciate the amendments brought up by the Senator. I hope others will come and at least explain their amendments, but I hope they will try to stick to amendments that actually affect the sales tax provisions. If we try to put on some other kind of taxes or take off some other kind of taxes, we are actually getting into the Ways and Means in the House which has the right to start all of these kinds of issues, and they call that a blue slip. That means they object to it and it is done for. So if we end up with one of those for this bill, what it actually does is kind of kill the bill. I am hoping after all the years of work that we don't kill the bill, particularly since we found a way to simplify it and make it a States rights situation, so States have to take some action and so the States understand the action they are taking. I am hoping we can do that. But I appreciate those explanations and perhaps there are some of those that somebody won't object to. I don't object. At this point, I yield the floor and suggest the absence of a quorum.

Mr. ENZI. Mr. President, I want to make a couple of comments on what has transpired here this afternoon and for the last several days. One of the toughest things to do is to pass a bill. One of the easiest things to do is to kill a bill. You can do that simply by creating some confusion. Around here you can do it by applying some rules and suggesting that part of the process could be backtracked and done differently and done over. It is pretty hard to get a bill to the floor. It doesn't happen very much. It could happen easier, it could happen more often. When you get one here, there are still a lot of ways to kill a bill and that is kind of what we are seeing because there are some people who say: Gee, if we don't get our amendment, we are going to kill the bill. We are going to vote against cloture, which is the only way to move on in the Senate because we like debate, we like pretty much unlimited debate. Debate can be constructive. There are things that need to be done on bills. I heard several good ideas. They have been objected to, so we are not going to get to actually vote on those. But one thing as an accountant that I want to bring up is this thing about audits, because that can loom pretty strong for a business. Audit is something that we know from the IRS and it is very scary. But the audits they are talking about are not going to happen to nearly the extent they think they are going to happen. Somebody will have to be avoiding the sales tax entirely and they will have to have a very strong suspicion that they exceed $1 million online in a year before they will ever audit because it costs money to audit. Especially it would cost money if you went over the border to another State to audit. Then there are some difficulties with being able to collect what is discovered in the audit. But it is only done when something seems very wrong. One of my clients I worked with for 10 years had big sales in the oilfield--lots of sales in the oilfield. We got audited on sales tax once in 10 years. I am pleased to say they did not find anything. It took them 2 weeks to do the audit and that was a very big business. It was very technical stuff. Of course they looked at it because a lot of them are very big sales. There are some confusing things in the sales too. But you have to have an audit in there for a little bit of honesty. So that is why that is in there. But it is not going to be something the States are going to jump on because it has some costs. If you are a government that wants to do audits--I remember when I was in the Wyoming legislature they used to talk about how much return they got out of their audit. They would get $20 or $30 to the $1 of cost. Consequently they used that as an argument for hiring even more auditors because they would find a lot more money. The intent of an audit is not to find $1 for every dollar that is expended. It is to find $20 or $30, somebody who is violating the law in a big way so you can afford the cost of the audit. That of course keeps all of the people a little bit more honest. So audit has to be in here but audit is being blown out of proportion, probably so we can try to kill the bill. I hope that is not the intention. They talked about needing to go to committee. I have gotten a couple of hearings on this in 12 years but have never been able to get a markup in the committee. This process has gotten this bill to the floor and I am hoping everybody will listen to their retailers and help out on this bill and get it finished. I can tell you, being in charge of this bill and one of the drafters of this bill, it is not a popularity contest you are winning. It is just the right thing to do. It is what the States need if they are going to have the revenue to provide all of the services that are in the municipalities--whether it is police or fire protection or cleaning the streets or whatever is done there, plus all of the charitable work people in the communities do too, because that is the sense of community they have so they contribute. All of that is going to dry up. If you ask your municipality how much money they get out of sales tax, I think the minimum one of them will say is 30 percent. Probably the maximum is 70 percent. But that is a lot of budget and that is declining as the Internet grows and the sales happen without the tax. So I hope people will help pass this bill and get this into effect. It is only an 11-page bill. That is a miracle around here. It is possible for people to read the bill. I thank the Senator from Massachusetts and appreciate the comments he made. He is new to the Senate but he obviously read the bill. I am very impressed with the comments he made. I hope people will help pass this bill. I yield the floor.

Mr. ENZI

Mr. ENZI. Mr. President, I want to congratulate the Senator from Maine on his speech. It was a tremendous history lesson. I have enjoyed getting to know him a little bit since he got here. I had quite an interesting surprise yesterday. He came to my office and he brought an American flag, all framed. The way he got it, there was a desk his great-aunt had. The desk was probably made in the 1860s. But behind one of the drawers they found this flag. It was a flag with 44 stars. Wyoming was the 44th State. So he presented this framed flag to me. Incidentally, that was only the flag of the United States for a 6-year period. Then some other States came in and we added them. It has an interesting arrangement of stars on it too, because the 44 stars do not fit in a nice even pattern unless you did four rows with 11 in a row. That changes the dimensions of the flag considerably. I appreciate his consideration on that. I appreciate the consideration he has given to pieces of legislation that I have seen him work on. We do not agree on all of those pieces of legislation, but it is nice to have the concern and the thought and the process for getting things done that he brings to the Senate. That is very nice. I too want to encourage my colleagues if they have amendments to bring them down. That is what we say this process is about. This is an amendment process on the floor, which everybody has asked for. We are doing it. So we need the amendments. A number of people have talked to me about different parts they had a potential concern about. I hope we solved their concern by actually looking at the wording in the bill. This is not a very difficult bill to read. Sometimes we do ones that are a couple of thousand pages. This one is 11 pages. I do not think there is anybody who will not be capable of reading the bill. Unlike most of the bills, this is in pretty normal language, rather than some of the conforming language that sometimes results around here. I think most of the problems retailers should have with this have been taken care of. One that the nonsales-tax States talk about, and the Senator from Illinois, Mr. Durbin, also mentioned, the people in those States still will not pay a sales tax. But if you happen to be one of the people selling into other States, and you sell a tremendous volume into other States, then under this bill you will be expected to collect and remit the sales tax, as any retailer in the States that have sales tax. There is an exemption. The Senator from Oregon, Mr. Wyden, asked us to have a compromise. That is why we have the exemption in there. It is a compromise. We started with it in the Senate as being a $500,000 exemption. The House folks convinced us--as I mentioned, this is a bipartisan, Republican and Democrat, bicameral, House and Senate effort. The House convinced us that $1 million was a more reasonable figure, and they gave some good reasons for it. Now $1 million would give any small businessman quite a few years, perhaps--I hope it is a short period of time, but it should give them quite an amount of time before they had to adjust to this, because they have to sell $1 million on line in a year before they have to start collecting the tax the next year. In a State where there is a sales tax and the people are selling in the brick-and-mortar store which we are trying to help out with this bill, they collect from every person from the first dime of sales. So we have given a little bit of a break to particularly the nontax States, and to those working on line that are small businesses to continue this effort to grow the Internet. Of course, we are hoping a lot of our businesses in our States will get to that million-dollar mark. But here is the status on the million- dollar mark. We are told that if we reduced that to $150,000 it would only affect less than one-quarter of 1 percent of the businesses in the United States--not very many. They are starting to be a relatively big business when they are doing $1 million on line. This does not count their in-store sales. This is just their on-line sales. So I hope the other States that have had some difficulty with that will realize that is a pretty liberal mark we have gone to. Of course, I know a lot of people are getting a lot of correspondence from eBay. eBay, in the 12 years I have been working on this bill, has consistently opposed it, even though they appeared almost up to the time we were ready to do the bill to be in agreement with some of the things that were in the bill. Incidentally, that is when we had a considerably bigger bill. It was about 80 pages long. This one we changed. The main difference is now there are States rights, which there should have always been. That is the way it is in the Constitution. This is a States rights bill. That reduces the length of it considerably. The million-dollar proposal is to give people time to adjust and collect. Incidentally, there is kind of a phase-in in this. Some people say, why don't we have kind of a phase-in? Well, we have 90 days. We agreed to do 6 months so people could gear up for it. Besides that 6 months, the States are going to have to provide free software to be able to do the tax, so that when they put in a ZIP Code for where they are sending the product, they will automatically know the tax. They talk about 9,600 tax jurisdictions. Well, in this there are only 46 different tax jurisdictions. Nevertheless, they put in that ZIP Code and they will know what the tax is and have no liability whatsoever because that falls on the people who provided them with this free software. This makes a huge difference to States, counties, and municipalities. I used to be a mayor. I was a mayor of a town that tripled in size during the 8 years I was mayor. Had it not been for sales tax, we would have been broke. I checked around to see how much towns and municipalities rely on the sales tax for their source of revenue. I was shocked. About the minimum that I run into is 30 percent. There are quite a few more than I ever thought that rely on sales tax for 70 percent of what they do. So what does a municipality do with its money? Well, let's see, a lot of them have schools they have to take care of, they have law enforcement they have to take care of, they have firefighters they have to take care of, some of them have ambulances. So it is all of the first responders essentially they have to take care of. If you are in the northern States, as I was, you have to do it for snow removal. People are really particular about snow removal. Incidentally, Wyoming is still having a little bit of winter. Let's see, today is Wednesday, so that is typically our spring. We have a lot of snow, even in April. That is when most of our moisture comes. We get snow in January too, but that is a real dry snow. In fact, we are such a dry climate that I often tell people that even our rain is only 80 percent moisture. Of course, a lot of it gets sucked up by the air as it falls. A long rainstorm in Wyoming might be 5 minutes. We get a total of 13 inches a year. So we rely on that snow. But if you are a mayor and it snows, you have a major problem, because people expect to be able to get around. I found out that if you plow it to the center, then they cannot make left-hand turns. If it is left on the ground very long and that freezes, then you really have a problem getting it up. If you plow it to the sides, you block in people's driveways and people's cars. That usually upsets them too. I remember when I was mayor, every once in a while I would get a call from a disgruntled citizen who would complain that I just plowed their driveway back in after they had gotten it open. They wanted to know what I was going to do about it. I would tell them to give me a few minutes. I would get in my car, which always had a snow shovel in the trunk. I would go to their house and start digging it out. Usually when they noticed me, they came running out and said: Oh, no, we did not intend for you to do that. I said: Well, everybody else is doing snow removal. I never got two calls on that. But that is another use for sales tax money. There are many more. All of the charities in a town usually go to the city council. They say, we have this valuable project. We need some money. Anybody who says they cannot fight city hall probably never tried. A lot of those requests are granted. But if the sales tax continues to shrink--that is what is happening with it now, State sales tax, county sales tax, local sales tax is all shrinking. If that continues to shrink, they are going to have to start cutting back on things they do. Of course, probably some of the charity things will be some of the first ones to go. It is always hard to tell what the net effect will be. But if they do not have any ability to increase the revenues they have--and most of the towns in Wyoming do not have a chance to increase the taxes they receive. Property taxes are limited by very specific sorts of things, such as how much you can levy for the cemetery, and how much you can levy for a library, and how much you can levy for fire. Those things do not begin to cover the cost of the service that is rendered. So to the people who are protecting the Internet, I would say it is pretty hard to flush your toilet on the Internet. Sometimes those utilities come into play with these things too. Those taxes are very important to almost all of the communities across the United States, in 46 States. The other four do not have a sales tax. One of the things people have said is, if they get this extra sales tax, why don't they bring down some of the taxes they currently have? Some of the States and some of the municipalities and counties will do that. I have had several of them tell me that if we could get a little bit more in sales tax, we would do that. But let me tell you a little problem we have in the Federal Government. We are out of money, so we are cutting back. And one of the ways we cut back was through the sequester. The way some of that is worded, some of these things are considered tax expenditures. For instance, the Federal Government promised to pay a property tax in lieu of real taxes. In other words, the municipality does not tax them, the county does not tax them. But the Federal Government says: Yes, we own property. If you can sell that property at a private sale, the private entity would have to pay property tax on that. So it is only fair that the Federal Government pays taxes in lieu of taxes. They have been doing that for a number of years. The value of the properties, of course, has gone up considerably, particularly in cities where there are Federal buildings, but also in the forests. I have people who know the value went up because they are able to lease some cabin land in national forests. Their payments have more than doubled in the last 3 years. That is a 100-percent increase. I guess this year it is even a more dramatic increase. But the Federal Government, while it is charging more for the property, is not paying more in property taxes, which would be the normal thing. This year, they are taking 5.3 percent out of every bit of that tax. Of course, I say to people: Wouldn't it be nice if when you file your Federal income taxes you could have taken 5.3 percent out of there? It is sort of the same thing. It is what the government said they would pay in taxes. There are a number of reasons these sales taxes are extremely important and getting more important. If you had Federal mineral royalties, you lost 5.3 percent of that too. That is because the States collect--half the money from the minerals in the State are supposed to be for the State and half are supposed to be for the Federal Government. The half the Federal Government received they considered to be revenue. The half that is supposed to stay with the States or go back to the States is considered a tax expenditure. Again, it was hit by 5.3 percent. One of the reasons this is 5.3 percent this year in the sequester instead of 2.3 percent--which is what it was across the board for the .3 percent--is we don't have any months left to revise those expenditures, but these are one-time payments. The time for condensing them has not expired, so at the most it should have been 2.3 percent. That is a different problem that I will handle in a different bill. I am hoping people will not try to gum this up with a whole bunch of nongermane or irrelevant motions. If we stick to relevant ones where we are really trying to improve this bill, I am in favor of it. If we are trying to do some other peripheral ones, in light of the tremendous support this bill has, I am hoping people will stick to the bill and try to perfect it. We can have votes on that. I see my friend from Tennessee is here. I yield the floor and reserve the remainder of my time.

Mr. ENZI. I thank the Senator from Tennessee for his comments. He is very involved in the Banking Committee. He understands the transaction taxes that they are talking about, and I appreciate his learned opinion on that. Mine comes from section 3, called ``Limitations,'' and in general it says: Nothing in this act should be construed as subjecting a seller or any other person to franchise, income, occupation, or any other types of taxes other than sales and use taxes. I hope we stick to that and make sure it just says ``sales and use taxes.'' I have worked on this for 12 years, so it is tough enough to extend it beyond that. I know there are lots of things people would like and to open this up. I appreciate the one amendment that was presented but was objected to, which was an amendment which would have continued to ensure--we already have a provision that says you cannot tax the Internet. You cannot tax the Internet. They wanted to extend that another 10 years, and it doesn't expire for another couple of years. I thank the Senator for all of the effort he has gone to on this bill and all the ways he has helped us. I appreciate his plea for people to come forward with their amendments. I suggest the absence of a quorum.

Mr. ENZI. Mr. President, I thank the Senator from Texas for his comments. There is definitely a problem. We had people miss votes on Monday night because the supposed furlough that the air traffic controllers had to have in effect delayed some planes for more than 1\1/2\ hours. I looked at some of the numbers, and I don't think that had to happen. Even within areas, there is enough flexibility to do better things. I noticed some of the sequester things in Wyoming that came out and made calls about them, and found out that people actually could change within their own budgets some things they were concerned with and make sure it didn't affect the customer. That is just good management. One of the things was closing down some of the visitors centers in Yellowstone and Grand Teton. They are not open yet because at this time we are just getting the snow cleared out. I called and asked about keeping them open and they said we don't have enough personnel. You have a gift shop there. That is a profit center. You are supposed to be making money on that. They said the money goes to the general fund. I said: Where do you think your money comes from? The gift shop should operate, and if they have a problem with personnel, all they have to do is the person who runs the gift shop opens the door, does their day's sales, and in the evening as they are ready to leave, I hope they would look up and down the street and see if another customer was coming, but if they were not, go ahead and lock the door and leave. That is just good business. That is the way they could operate. It is my understanding those gift shops and visitors centers will now be opened. There are ways that could be handled. To go back to the bill----

Mr. ENZI. I yield the floor.

Mr. ENZI. Mr. President, I appreciate that question. One of the reasons there is difficulty, there is the blue-slip problem with the House, but also we have the section on limitations in this bill that appears on page 7. There are only 11 pages in this bill so it ought to be fairly easy for people to look through it and see what is included and what is not included. We have pretty much limited this--not pretty much, we definitely limit this to sales and use taxes. When they put other peripheral things in there, then they are opening the bill to go into a lot of different things. So I hope that would not happen. Of course, there was some question earlier in one of the speeches by the Senator from Montana about the real difficulties of being able to administer this. Again, there are only 11 pages in the bill. Page 4 covers software, free of charge for remote sellers, that calculates the sales and use tax on that transaction due at the time it is completed. It also has to provide a way to file the sales and use tax returns, and it has to be updated for any rate changes that there happen to be. The responsibility is all on the State to provide the software. I think the provisions that are in there pretty well specify how carefully that has to be done. If it is not, there is no liability on the remote seller. So I think we have covered that. Yes, it will be difficult to do that software, but that is part of the provision in here. It can be done. This is a day, as the Senator from Tennessee points out, that we can put in a ZIP Code and find out what our sales tax is going to be. That is what this program is calling for. I think I have that right. I rely on the Senator from Tennessee to answer that question more specifically.

Mr. ENZI. Mr. President, I suggest the absence a quorum.

Mr. ENZI. Mr. President, Senator Brown was here earlier, and I had wanted to be able to speak briefly. So if, when I finish my remarks, he is here, I ask unanimous consent that he be recognized to speak.

Mr. ENZI. I want to talk about what we have just heard here and an implication that we are not champions of small business. I was in small business. I had shoestores, retail shoestores, so that is why I know some of these problems. I know about the people coming in, trying on the shoes, getting exactly what fits, having all of the service of looking through all of the styles and that sort of thing, and then leaving and making a purchase on the Internet. Talking to other retailers now, that is not the biggest irritation. They buy it on the Internet, the product has a problem--and every product has the potential of having some problem--and they bring it back to the store where they got the free service, where they did not buy the shoe, and they ask for it to be replaced. I hope people can see the inequity in that. But we are not talking about the small business like the shoestore I had. We are talking about small businesses that are selling online and are doing over $1 million a year in sales. I do not think people would consider that to be a really small business--$1 million in sales. If they are doing $1 million in sales, you can pretty much guarantee that they are automated. They are automated in their manufacturing, they are automated in their sales. That means they have a computer. Not many businesses today function without a computer. If they have a computer, you would be amazed at some of the things those computers will do. I go back to Wyoming almost every weekend, and I visit businesses. I visit businesses so they can tell me what kinds of problems the Federal Government is causing for them. I am amazed at the automation they have. I am amazed at what they are able to do. And most of it is because of computers. Now we are saying--and I think computers kind of started out on that coast--that computers just do not have the capability to do these kinds of things. To be able to figure a sales tax? All you have to have is a ZIP Code, and it eliminates the 9,600 jurisdictions we are talking about here. That computer can figure that sales tax, and at the end of the month, that same computer will have kept track of all of this stuff, and it will do the reports that are necessary electronically. It can probably do that with about five or six key taps, maybe less than that. I am sure they could actually be set to send the report on the last day of the month at a specific hour. That is how computers work. So an argument that this cannot be done--I do not think anybody will buy that. And the States would not be willing to provide those programs free of charge and then put in the protections from liabilities and errors if they were not sure they could do it. The reason they put in those protections for the retailer is because they are sure it can be done. I was fascinated by the audits. If they are using that computer program, how could they vary from what they actually take in to actually sell? The program takes it in, the program holds it, and the program sends it out with the report. There is not a lot of room for error. Then they say they are going to be running around auditing those firms. They are going to audit the firm that looks as if it is shipping everything everywhere and not reporting at all. That is what accountants do. They figure out the high risk. They are not going to go in and look for pennies here and there. They go in and look for enough to at least cover the cost of the audit. If you are not doing probably 10 or 20 times the value of the audit, you are not going to be hired to do many of them. So those that are complying, using the program, they are not going to have any problem. But this exempts all the businesses that are doing less than $1 million online in a given year. Until you do $1 million online in a given year, you are exempt from it. I would imagine that a lot of those nurseries do not hit the million- dollar mark. They would like to hit the million-dollar mark, and I would like them to hit the million-dollar mark, and if they got to that million-dollar mark, I think they would be so overjoyed, they would say: I am automating on the computer. I will be happy to do it because maybe I can sell $2 million worth of sales if that is the case. Now, comments on the streamlined sales tax. My State was one of the first ones to get into it. So was South Dakota, so were Nebraska and another 20, 21 States besides those. The comment was that you cannot streamline this. What kind of incentive has there been for them to streamline it more? The purpose of the compact is to streamline it more, but at the moment they are having to protect their sales within their State to make sure they are not losing the revenues they were already counting on. They knew there was this little Supreme Court case that is now 20 years old that challenged us to fix it. That is what we are trying to do here--fix it. If that fix goes in, I am betting that a lot more States will join the streamlined sales tax and it will streamline more than what we envisioned. But even if they do not, there are requirements in here that keep it uniform enough. And with the computers, we can show examples of how people already do this sort of thing on the computer. That should take care of a lot of their problems. I yield the floor under the previous order for Senator Brown.

Mr. ENZI

Mr. ENZI. Mr. President, I thank the Senator from Tennessee, Mr. Alexander, and the Senator from Illinois, Mr. Durbin, for this discussion they have had where I think they cleared up a lot of the confusion there might be over the bill. They have presented excellent reasons why we need to get this bill done, and why we need to get it done now--so we can continue to grow businesses in our States instead of growing businesses outside of our States. There are a number of things people have mentioned. One of the big ones I want to talk about is the small seller exemption. I know Senator Wyden from Oregon has suggested a compromise for the whole bill which was to create the nontax States to be a haven for all Internet sales, and that won't work. Our purpose is not to move all of the business online out of our own States but to keep it there. But there is a compromise in this bill. It is called the small seller exemption, and that is where people who are starting in business don't have to collect the tax when they are out of State. With in-State sales, a lot of them will have retail sales in their State as well as hopefully some online sales. On what they sell in their bricks-and- mortar store, they collect sales tax from everybody who buys from them. There is no exemption. But the compromise we made for the online sales was until a retailer hits the $1 million mark in a year--and we would love for them to hit the $1 million mark and have that kind of business. But until they do, they are protected in that they don't have to collect the tax. We give them a break over the in-State retailers. Of course, the ones who are in State who are selling out of State have that same online break. But that is why we have a small seller exemption, to continue to grow small businesses that are using the Internet. We want the Internet to grow and are not discriminating against the Internet. And as has been mentioned, there will be no tax on the use of the Internet. That is not a part of this bill. This is a tax on what people buy on the Internet, because States already anticipate that the sales tax they have in place is going to be paid on every purchase. When that money comes back, part usually goes to the State, part goes to the county, part goes to the towns. That is to provide for their schools, fire protection, for all of the services people who live in the communities are used to. I can tell you that in Wyoming that makes up at least 30 percent of everybody's budget. I know in one town it is 70 percent of their budget. So if you start eliminating the sales tax by getting products from out of State, you are wiping out services in the local communities. Those local communities are where the Main Street retailers, the shopping center retailers--the brick-and-mortar retailers--are the ones paying property tax. They are hiring local people, and they are also participating in the community in a number of ways. School yearbooks probably wouldn't exist without the participation of the local merchants. We want to continue to encourage the local merchants, and so we came up with the small seller exemption of $1 million. You don't start collecting the tax and you don't need to get the free software to be able to collect the tax until you hit the $1 million mark in a year, and then that would go into effect. We looked into a number of different levels. Our older bill had \1/2\ million in the Senate bill and the House had $1 million in their bill. I said, Let's give a little more flexibility. Let's go with the $1 million. So that is how we wound up with $1 million. I will comment more on this later, but I see my fellow Senator is here who would probably like to make a comment. I yield the floor and reserve the remainder of my time.

Mr. ENZI

Mr. ENZI. I thank the Senator from Illinois, Mr. Durbin, for his interest and participation in this issue, his ability to explain it, and for the way he has brought a lot of people along in helping out with this bill. He has been a great replacement, and we have made more progress than we ever have in the other 14 years of working on the bill. So I thank him for that and for his ability to explain things so clearly. I also want to thank Senator Lamar Alexander who helped us change this bill in the last year from about an 80-page bill to an 11-page bill and made it States rights. As Senator Durbin so eloquently explained, this takes action by the States. This is just to clear up the Quill case that made it a little confusing about whether they could charge a tax and then challenged Congress to fix the problem. The solution Senator Alexander came up with condensed the bill considerably and made it a lot easier. But it made it a States rights issue so that the States have to take some action. I thank Senator Heitkamp as well. She is brandnew to the bill but has more years of experience than anybody because she was a part of the Quill case when it came up. She was representing North Dakota in that case, and that is the other side of the case. She can explain the intricacies of that and the challenge we were given, and the number of reasons why it didn't happen earlier. One of the reasons is that 20 years ago the Internet was in its infancy and nobody knew what its capabilities were going to be. Most people didn't even know it was out there. That has changed over quite a period of time to where it is now one of the handy tools everybody uses. We have come to recognize there are apps that are available that will answer any question and sources of information that will provide us with what we need to know on virtually any subject. I think that has probably put some encyclopedias out of business, but it has made information more readily available, and it has made products available that people didn't have the availability of before. But it is creating a bit of a dilemma that marketplace fairness straightens out. Today we are scheduled to vote on the motion to proceed to the bill at 5:30, and I do strongly encourage my colleagues to vote yes. Let me explain why. As Senator Durbin said, I have been working on this sales tax fairness issue since joining the Senate in 1997, and I may have a unique perspective on the dozens of proposals that have been introduced. For instance, I have worked sales tax from a number of different aspects. I worked the sales tax issue when I was in the Wyoming Legislature. I know when our legislators were considering sales tax they didn't intend to discriminate against the people in the communities, those who hire the people in the communities and pay the property tax to the communities and participate in all of the community events. They definitely didn't anticipate they were going to be the source where people could come in and feel and touch and try on the product and then check the bar code with their cell phone--one of the advances made possible now through Internet use--and then find out if there is a lower price, which is usually based on no sales tax. I am pleased some businesses across the Nation have said that isn't fair and have decided to voluntarily do the sales tax. And there is no problem with them doing that. I have also been a retailer, so I know that feeling. My wife and I had a shoe store, so I know the feeling, again, the Senator from Illinois described, of people coming in, trying it on, feeling it, making sure it is the right size and then checking to see where else it is available. It is discouraging when the sales tax is the difference. So as a former small business owner, I believe it is important to level that playing field for all retailers--the in-store, the catalogue, and the online--so an outdated rule for sales tax collection doesn't adversely impact particularly small businesses and Main Street retailers. I know a lot of year books would never be published if it wasn't for the support of some of the local businesses. Thousands of these local businesses are forced to do business at a competitive disadvantage because they have to collect a sales tax or a use tax and remote sellers don't. In some States that can mean a 5- to 10-percent price disadvantage. We should not be subsidizing some taxpayers at the expense of others. All businesses and their retail sales should be treated equally. As a former mayor, I know sales taxes go to State and local governments to bring in needed revenue for maintaining schools, fixing our roads, supporting law enforcement, fire protection, those first responders we are always so conscious of, particularly today and through this last week. If Congress fails to authorize States to collect tax on remote sales, and electronic commerce continues to grow, we are implicitly blessing a situation where States will be forced to raise other taxes, such as income and property taxes, to offset the growing loss of sales tax revenue. Do we want that to happen? I don't think so. We need to promote economic growth, not stifle it. As the Supreme Court identified in the Quill v. North Dakota decision in 1992, the Quill decision challenged Congress to come up with a better system, a way of making it fair. The local brick-and-mortar retailers collect sales taxes, while many online and catalog retailers are exempt from collecting the same tax as a result of that case, and that was based on whether they had a nexus. The nexus has changed dramatically since that time. That used to be where you would go and actually pick up something, but now it is where you can order something and that can be even moved around the country virtually at will. So we designated some States as not having to do it. Web sites could be set up in that State for people to sell through from anywhere. So the taxes need to be collected. It needs to be fair, and right now it is not only fundamentally unfair to Main Street retailers, but it is costing States and localities billions in lost revenue. The Supreme Court invited Congress to address this issue, and we stalled. We know that early on the Internet was new, but now everything is done on the Internet. So now is the time for Congress to act. Many Americans don't realize that when they buy something online or order something from the catalog of a business outside their own State, they still owe the sales tax. I know from being a legislator that was part of what we put in place. There is a form in Wyoming that you can fill out and pay your tax. It is pretty hard to keep track of, particularly on smaller items, but it ought to be easier on big items. And I do know there are about three people who comply with that. For over a decade Congress has been debating how to best allow States to collect sales tax from the online retailers in a way that puts Main Street businesses on a level playing field with the online retailers. So on February 14, 2013, the bicameral--House and Senate--and bipartisan--Republicans and Democrats--put together the Marketplace Fairness Act that was introduced to close that 20-year loophole that distorts the American marketplace by picking winners and losers, by subsidizing some businesses at the expense of other businesses and subsidizing some taxpayers at the expense of other taxpayers. All businesses in retail sales and all consumers and their purchases should be treated equally. The bill also empowers States to make the decision themselves. This is not Congress saying what has to be done or whether they collect them. If they choose to collect already existing sales taxes on all online purchases regardless of whether the sale was online or in-store, States will be able to if this bill passes. If they want to keep things the way they are, that is the State's choice. That is why this bill is the States rights bill. The Marketplace Fairness Act does not tax Internet use, it does not tax Internet services, and it does not raise taxes. It gives States the right to collect what is owed by the purchasing individuals. Some argue that the bill is a disguise to create taxes. It is not. Consumers are already supposed to pay taxes and use taxes in most States for purchases made over the phone, by mail, or by way of the Internet. Mr. President, in a couple of minutes we are going to have a moment of silence for the tragic events that happened. I yield the floor for the time to be able to do that.

Mr. ENZI

Mr. ENZI. To return to the discussion on marketplace fairness, I mentioned that most consumers are aware they are supposed to pay the tax on purchases that the retailer does not choose to collect at the time of the purchase, so I would like to provide some highlights of what the Marketplace Fairness Act actually accomplishes. The bill gives the States the right to decide to collect or not collect taxes that are already owed. The legislation would simplify and streamline the country's more than 9,000 diverse State tax jurisdictions and provide 2 options by which States could begin collecting sales taxes from online and catalog purchases. The bill also carves out small businesses so that they won't be adversely affected by the new law by exempting businesses with less than $1 million in online or out-of-State sales from the collection requirements until they have had a year in which they have had more than $1 million worth of sales. This small business exemption will protect small merchants and give new businesses time to get started. As has been mentioned, when they meet that level, then they have to be provided with a program that will do the calculations for them, provide for submitting the revenues, and also hold them harmless for any errors there might be in the program. So don't let the critics get away with saying this type of simplification can't be done. The different tax rates and jurisdictions are no problem for today's software programs. When you order something online, you have to put in your ZIP Code. The ZIP Code will tell what the tax is from whatever jurisdiction. As a former mayor and State legislator, I strongly favor allowing States the authority to require sales and use tax collection from retailers on all sales for each State that chooses to do so. We need to implement a plan that will allow States to collect revenue using mechanisms already approved by their local leaders. We need to allow States the ability to collect the sales taxes they already require. If enacted, it would provide approximately $23 billion in fiscal relief for States for which Congress does not have to find an offset. This will give States less of an excuse to come knocking at the Federal door for handouts and will reduce the problem of federally attached strings. A lot of people don't realize that the Federal Government is out of money, and that is shown by what was done through the sequester because the Federal Government usually pays property tax to States and localities that have Federal property. That amount has never been equal to what other people would be paying in their property taxes, but it has been a show of good faith that they recognize that with the government there, there is a loss of revenue and that the Federal Government should do something. So there is a tax level they have been paying. It hasn't gone up much and it hasn't gone down much until this year. Then, as part of the sequester, they decided they would hold 5.3 percent from all the States and all the local governments. That is called payment in lieu of taxes, and that is one way the States and the counties have lost money and a way they are going to have to make up for it if that continues. But there is also the possibility that the revenue they take in from this can reduce something like property taxes. For many years I have worked with all the interested parties to find a mutually agreeable legislative package to introduce and ultimately enact into public law. This year Senators Durbin, Alexander, Heitkamp, and I worked together with 25 of our bipartisan Senate colleagues to produce a bill that assists sellers and State and local governments to simplify taxes and use collection and administration. We are working with our House supporters--Representatives Steve Womack, Jackie Speier, Peter Welch, and John Conyers--and have found common ground on this important issue to move forward with a bipartisan, bicameral bill in this Congress. I wish to publicly commend all of my Senate and House colleagues in taking a leadership role and working on this important issue. The Marketplace Fairness Act is about States rights, and it is about fairness on the budget bill. We had a vote on this, and I was very pleased that 75 of the 100 Senators voted in favor of making the marketplace fair. So I strongly encourage my colleagues to vote for the motion to proceed on S. 743, the Marketplace Fairness Act, tonight at 5:30 when we have that vote. I am hoping we will be able to duplicate what we did before and support the goals of States rights and a level playing field for all businesses. I yield the floor, and I suggest the absence of a quorum.

Mr. ENZI

Mr. ENZI. Mr. President, I wish to thank the leader for that moment of silence. I hope everybody in America will keep the people of Boston--particularly those who were injured or lost family members and those who saw the pain and the tragedy--in their prayers. I hope we would keep all the people across America who witnessed that on television or saw the replays of it on television in our prayers, and I hope the recovery will bring Americans together, as happened on 9/11.