The Marketplace Fairness Act (MFA) is currently being debated in our nation's capitol. The MFA would allow states that have a streamlined sales tax code, which Georgia has, to require online retailers to collect and remit sales taxes on items purchased in Georgia.
Overwhelmingly passed by the U.S. Senate in May with the help of both of Georgia's Senators, the MFA is now in the House. Rep. Austin Scott (R) and Rep. Hank Johnson (D) are co-sponsors of the House version of the bill.
The debate on this issue centers around whether requiring online retailers to collect and remit sales taxes is going to hurt the economy or help it. The belief of GMA is that any legislation that removes the up to seven percent price disadvantage local retailers in Georgia face when competing with online merchants is a good thing for our state and communities.
Strong local economies are built on the foundation that local businesses provide. Georgia's local entrepreneurs and small businesses create jobs and economic activity that in turn generate sales taxes that help keep property taxes low.
If this loophole remains in place, Georgia's Main Street retailers will continue to lose customers and we'll continue to see a loss of jobs and economic activity in our communities. By ending this unequal tax treatment, which tends to distort market forces, a more competitive, pro-growth and level playing field would be created; exactly what a free marketplace needs in order to thrive.
When we look at this issue, we tend to narrow our field of vision and focus in on whether the MFA would hurt or help the economy and whether it creates a new tax or not. But what city officials see on the periphery of this issue is this: a public school system that remains in fiscal distress with fewer teachers and shorter school calendars; police and fire departments underfunded or disbanded entirely; and transportation and water/sewer needs not being met.
While strong local economies are built on strong local businesses, our schools, public safety, and public infrastructure play a vital role in creating and supporting a healthy business environment. In other words, it's a reciprocal relationship; the community needs local businesses and local businesses need the community.
Passage of the MFA would bring in more than $800 million in sales tax revenues to Georgia and its local governments. In addition to leveling the playing field between online merchants and brick-and-mortar retailers, passage of the MFA would also help Georgia and its communities make needed investments in schools, infrastructure, public safety and other quality-of-life issues that help create a healthy economic environment.
Our local businesses, which make our communities strong, need to be treated fairly. It's time to talk to our Congressional delegation and ask them to support the Marketplace Fairness Act.