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May 7, 2013

RE: Marketplace Fairness Act Passes Senate: Thanks to Mayors Who Voiced Support for Main Street Retailers

Dear Mayor:

Thanks to your efforts and the work of municipal officials in other States, last night the U.S. Senate passed the Marketplace Fairness Act with a vote of 69-27 in favor of the legislation. We want to thank Senator Menendez for his support on this. (Senator Lautenberg did not vote on the bill.)

The Marketplace Fairness Act was introduced by Senators Mike Enzi, Dick Durbin and Lamar Alexander. It is intended to level the retail “playing field” for our Main Street merchants, by eliminating a competitive advantage enjoyed by internet marketers.

Under current law, states can only collect sales taxes from retailers that have a physical presence in their state. People who order items online from another state are supposed to declare the purchases on their tax forms, but few do. The Marketplace Fairness Act would empower states to tax online purchases but would exempt small businesses that earn less than $1 million annually from out-of-state sales. It does not create any new tax or increase any existing tax. It simply provides for the enforcement of state and local governments' authority and levels the playing field between Main Street and online retailers.

While the lion’s share of New Jersey’s Sales Tax is used to finance State government operations, ½ of 1 penny of the 7% sales tax is constitutionally dedicated to property tax relief.

The League has long supported a Federal fix to the disparity. Our statements and letters on this have consistently made the following points:

  • The Internet tax exemption gives electronic merchants a competitive advantage over our Main Street businesspeople.
  • Merchants who maintain a physical presence in our communities pay property taxes, which are used to pave and police our roads, to build and staff our schools and libraries, to secure and preserve our parks and recreational facilities.
  • They also employ our fellow citizens, who, in turn, pay income taxes, and who buy or rent homes and pay their own property taxes.
  • But that is just the start of what our hometown merchants contribute to the community. They contribute to local charities, sponsor youth sports teams and, in a thousand other ways, they give life to the communities that contribute to their prosperity.

The bill faces an uncertain future in the House of Representatives. Please contact your Congressman and ask that he support Marketplace Fairness.

Very truly yours,

Janice S. Mironov. President,
New Jersey League of Municipalities,
Mayor, East Windsor Township

Brian Wahler
Mayor, Piscataway
Member, NJLM Executive Board
Chair, NJLM Telecommunications Study Committee





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