House Judiciary Committee Ranking Member John Conyers (MI-13) today gave the following statement during the hearing of H.R. 2887, the "No Regulation Without Representation Act of 2017."
Before I begin my remarks, I’d like to take a moment to recognize Joseph Ehrenkrantz for his dedicated service to the House of Representatives. Over the past two years, he has diligently served the House Judiciary Committee as a Professional Staff Member.
Joe began his career with the House Judiciary Committee Democrats shortly after graduation, and has worked tirelessly on issues of civil rights, state and local taxation, and voting rights ever since.
Joe has served the Members and staff of the Committee with great energy and enthusiasm, working to ensure the smooth functioning of Committee business by coordinating briefings, staffing hearings, and clerking markups.
We thank Joe for his many outstanding contributions to the House Judiciary Committee and the U.S. House of Representatives, and wish him well as he begins law school at Georgetown University this fall.
He will surely be missed.
Turning to today’s hearing, which focuses on H.R. 2887, the “No Regulation Without Representation Act of 2017,” it appears that supporters of this legislation intend to address the apparent problem of states regulating beyond their borders.
Twenty-five years ago, the Supreme Court in Quill held that a state may require a business to remit a sales tax only if such business had a physical presence in the state where the goods or services are provided.
In an effort to respond to this holding, various legislative responses have been introduced over the years, including two of which I strongly supported, namely, The Remote Transactions Parity Act and the Marketplace Fairness Act.
Although one of these bipartisan measures overwhelmingly passed the Senate in 2013, our Committee has unfortunately failed to consider either of these bills.
Instead, we are focusing today on H.R. 2887, a highly-flawed measure.
Among its many flaws, this bill would eviscerate the 10th Amendment and override the powers of all 50 states by expanding the physical presence standard to all taxes and all regulations.
H.R. 2887 represents an extreme rethinking of the constitutional role of states in our Nation and would strip essential consumer protection powers and taxing authority from all 50 states.
To quote the bipartisan National Governors Association and the National Conference of State Legislatures, this legislation “is a direct threat to representative self-government.”
Simply put, H.R. 2887 would preempt tens of thousands of state laws and saddle these states with untenable budget constraints by reducing their ability to collect tax revenues.
Second, this bill appears to ignore the real problems that main street retailers face today.
Local retailers—that have to collect sales taxes—are desperately struggling to compete with the reduced prices and conveniences offered by remote Internet sellers, whose online prices are generally lower because many consumers do not pay any sales taxes and thereby can save upwards of 10% or more on the purchase price of these items.
Technological advancements have made it easier for consumers to take advantage of this disparity and the consequences of this loophole are becoming increasingly more apparent.
Since October, at least 10 major, nationwide brick and mortar retailers have filed for bankruptcy and more than 90,000 workers have been laid off.
Retail sector growth is at its weakest since the Great Recession, and recent projections estimate that a quarter of all U.S. shopping malls will close in the next five years.
Without question, I am a strong supporter of competition, especially when it benefits consumers and encourages innovation. Nevertheless, competitors should compete on things other than sales tax policy.
We should ensure parity at the point of sale among retailers and level the playing field.
Finally, H.R. 2887, by codifying Quill, would effectively prevent states and local governments from accessing a substantial part of their tax base.
State governments rely on sales and use taxes for nearly one third of their total tax revenue. Yet, as more Americans purchase more of their goods on the internet, the states receive less in sales tax revenue.
We owe it to our local communities and local retailers, as well as state and local governments, to take up helpful legislation rather than considering such flawed measures as H.R. 2887. Accordingly, I urge Committee Chairman Goodlatte and Subcommittee Chairman Marino to instead consider H.R. 2193, the “Remote Transaction Parity Act,” bipartisan legislation introduced by Representative Kristi Noem earlier this year.
In closing, I look forward to hearing the testimony from our witnesses today and yield back the balance of my time.
