WASHINGTON, DC—This week the Senate introduced the Marketplace Fairness Act of 2015. Like its earlier version, the act seeks to give states the ability to levy sales taxes on online purchases made by state residences. This, of course, has long been a goal of cities and states – to say nothing of brick-and-mortar retailers irked by the competitive disadvantage they are under. The measure has never gotten closer to fruition than it did in 2014, when advocates were pushing for it to pass until the eleventh hour. However, it never got past a House of Representatives committee.

So what is different this year? A couple of things, a spokesman for the National Retail Federation tells GlobeSt.com. Awareness of the measure and what it done has grown and it has garnered more supporters. "The momentum for the measure has never stopped; it has only increased from last year," he says.

Also, there is a sense that this Congress is willing to advance issues dear to the commercial real estate industry's heart. Last month, for example, the Senate Finance Committee approved a part of the reform measure to the Foreign Investment in Real Property Tax Act in a markup—specifically a proposal to double the FIRPTA free investment that a foreigner can make in a publicly traded REIT to 10%.

Finally, there is the curious incidence of Supreme Court Justice Anthony Kennedy's unusually blunt comments in an unrelated case in which online retailers sued the state of Colorado over a tax matter. The case itself was returned to the lower court but Kennedy took it upon himself to opinion on the case that started it all in 1992: Quill Corporation vs. North Dakota. That was the case that established the "physical presence" standard that allows online retailers to sell without collecting sales taxes.

In his concurring opinion on the Colorado tax case, Kennedy said it was time to rethink that finding.

"Quill now harms states to a degree far greater than could have been anticipated earlier," Kennedy wrote.

The Supreme Court, of course, does not play a role in writing legislation but Kennedy's comments suggest that another case that makes its way to the Supreme Court on this issue might be addressed differently. In other words, the legislative branch should act before the judicial one is forced to.

Instant Insights /

What's Different About This Year's Marketplace Fairness Act?

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