The state of play: GFOA's legislative priorities in the 114th Congress: several legislative proposals are being addressed in this Congress; marketplace fairness, bank-qualified debt, and high-quality liquid assets legislation are top priorities.

Author:Brock, Emily S.
Position:Federal Focus
 
FREE EXCERPT

The 2016 fall Congressional season will likely prove to be an exciting time. As many members of Congress set their sights on reelection campaigns, several are also focusing their efforts on the most essential legislation before packing up and heading home to campaign. Proposals are moving uncharacteristically quickly, and GFOA's Federal Liaison Center is working to ensure that state and local governments' legislative priorities find success in the most essential legislation.

Several legislative proposals are being addressed in this Congress. Marketplace fairness (or e-fairness) legislation is a top priority. This legislation would bring federal law into the digital age by enabling state and local governments to collect sales taxes on online purchases that are already owed to them but not being paid. Bank-qualified debt legislation, which would not only increase the bank-qualified debt cap to $30 million and bring the program into the modern age but also enable governments to increase the amount of bank-qualified bonds they can issue--and realize corresponding cost savings--is also extremely important. The third legislative priority under consideration by this Congress is high-quality liquid assets (FIQLA) legislation, which would secure the classification of municipal securities as HQLA and thus control borrowing costs for state and local governments to finance public infrastructure.

This article describes the background of each proposal, the progress each has made during the 114th Congress, and assesses the possible next steps for each of these three legislative priorities.

MARKETPLACE FAIRNESS (E-FAIRNESS) LEGISLATION

Background. The failure of consumers to pay online sales and use taxes--a result of federal inaction--results in the loss of billions of dollars per year in taxes owed to state and local governments on remote sales. For example, according to the Department of Commerce, e-commerce sales in 2005 were $87 billion, and grew to $225.5 billion in 2012. Correspondingly, the National Conference of State Legislatures revealed that these sales produced approximately $23 billion in unpaid sales and use taxes in 2012.

Passing the Marketplace Fairness Act would finally bring federal law into the digital age by enabling state and local governments to collect sales taxes on online purchases that are already owed to them but are not being paid. It would level the playing field for brick and mortar retailers that are currently at a five to ten percent competitive disadvantage to remote sellers because Congress has failed to act to update national tax laws.

What Happened in the I 14th Congress. January 2015 marked the beginning of the 114th Congress and new momentum behind legislation that would compel...

To continue reading

FREE SIGN UP