quorum call:

mr. kerry: mr. president? the presiding officer: the senator from massachusetts.

mr. kerry: i ask unanimous consent that the quorum call be dispensed with. the presiding officer: without objection. mr. kerry: mr. president, i ask unanimous consent that the judiciary committee be discharged en bloc of the following nominations: pn2353 and p.n.2349, that the senate then proceed en bloc to the nominations, that the nominations be confirmed en bloc and the motions to reconsider be laid upon the table, that any statements relating to the nominations appear at the appropriate place in the record as if read. the president be immediately notified of the senate's action and the senate then resume legislative session. the presiding officer: without objection. mr. kerry: mr. president, i ask unanimous consent that after any leader time on tuesday, decemb december 21st, senator alexander be recognized for up to 10 minutes. ing that following his remarks, the senate the house message with respect to h.r. 3082 and that the time until 10:15 a.m.

be divided as follows: 10 minutes under the control of senator inouye or designee, 15 minutes under the control of senator mccain. that upon the use or yielding back of time, the senate then proceed to vote on the motion to invoke cloture on the reid motion to concur in the house amendment to the senate amendment to h.r. 3082 with amendment number 4885. further that upon the conclusion of the vote, senator specter then be recognized for his farewell speech. that any time utilized by senator specter count postcloture if applicable. the presiding officer: without objection. mr. kerry: mr. president, i ask unanimous consent that when the senate completes its business today, it adjourn until 9:30 a.m. on tuesday, december 21st, that following the prayer and pledge, the journal of proceedings be approved to date, the morning hour be deemed expired, the time for the two leaders be reserved until later in the day, and that

following any leader remarks, senator alexander be recognized in morning business for up to 10 minutes and that following his remarks the senate resume consideration of the motion to concur with respect to the house message on h.r. 3082 as provided for under the previous order. the presiding officer: without objection. mr. kerry: mr. president, senators should expect the first vote of the day to begin at approximately 10:15 a.m. tomorrow. that vote will be on the motion to invoke cloture on the motion to concur with respect to h.r. 3082, which is the vehicle for the continuing resolution. following the vote, senator specter will deliver his farewell remarks to the senate. upon disposition of the c.r., the senate will vote on the motion to invoke cloture on the new start treaty. we also have an agreement to consider the pearson and martinez nominations and we could debate on those tomorrow afternoon. so if there is no further business to come before the

senate, i ask that it adjourn under the previous order. the presiding officer: the senate stands adjourned until

i guess i scott peterson and the supreme landfill tax governing board and cheery of the direct marketing association. >> host: one of the policy debates have been in washington and state capitals around the united states is the issue of internet sales tax. that is our topic this week on "the communicators." we're joined by scott peterson of extreme plan sales tax governing board. he's the executive are. and jerry cerasale of the direct marketing association can is senior vice president for government affairs. gentlemen, thank you "the communicators." mr. peterson, tell us first would streamline sales tax governing board is and what is your position on the issue of taxing sales on the internet. just do it is a nonprofit association of aids. all the members are state governments themselves who have two goals. the first goal is to make the

sales tax simpler and easier to administer. and the second is to give all the sales tax currently on the books collected. >> host: mr. cerasale, what is your issue? >> guest: the issue really stands from out-of-state marketers when they become sales-tax product is perceived. they have no present in the supreme court has had no because it so complicated it interferes with interstate commerce. and scott's group is trying to simplify, is trying to simplify that. so it exists as a question of can a state forcing out-of-state retailer to become their unpaid collection agent.

post goes to your organization does not have a problem with taxing and amazon sale? >> guest: no, taxes are purchased in the collect sales taxes are in fact owed and that is you have to follow the law. that is for the state is. the question is how was it collected and who collects it and so forth. >> host: mr. peterson, do you estimate that states are losing revenue because of internet sales? >> guest: yes, internet and catalog sales. this often awful lot of catalog sales. with sunni states will fail to collect $26 million this year and we are very concerned that with the really successful way that the internet has changed retailing but that number will get even larger in the future. we're 70 million-dollar

subbasement. might employers. also joining us is grant gross who is the eeg for new service. >> guest: assume i sales-tax groups have been trying to streamline their tax question for about a decade now and collect sales tax from internet retailers that don't reside in a state. why now? widemouthed team to have gained a lot of traction at least in congress? >> guest: i agree with you. there hasn't been a lot of traction in congresscome up with of that because of some odd issues to deal with. we're asking congress to give states this is a states rights issue. which congress has the ability to do. and because it is tax to let it

come the perception of tax related, it is polarized. we are gaining traction. we have more than half the states that sales-tax, remember georgia becomes a member. we're actively working with the remaining states to convince them of the necessity of changing a lot, making it easier for retailers. and will have more traction in the context. >> most people who buy online, as he said, that practice is growing. more and more people are buying online than ever before. they don't pay the sales tax to the state of what i buy off of sales-tax deny state for my ebay purchases, for example. actually, even if a non-collect the tax.

>> we not see it as a tax increase because you as a consumer have a requirement to pay the tax with your charge the tax by the retailer or not. you're not alone. the majority of people in this country have either a lack of understanding for a sales-tax works or they think this is an opportunity to save on their taxes. they don't realize that it is a crime not to pay to use tax. and while it is not one that is often employers, it is one that is truly on the books. if u.s. consumers if they think it's fair if the person on the corner store have to charge sales tax, but the person in the other state behind the internet doesn't have to charge sales tax can be overwhelming majority of people say it not fair. they should both have to charge. >> i think a lot of lawmakers in

congress see a tax increase and would have triple voting to approve -- approved the streamlined sales tax? >> guest: i have been asked all of them, but it's a states rights issue. if you ask if they think the state should have more authority than they do today, but they do internally, there are going to say yes. and then you have to go to the specifics of okay, this is one of the things we have more authority to do. we understand there are people that are buying the concept of taxation to be nerve-racking. but that doesn't mean the services go away. if not in front in front collect sales tax committee means that poor person who owns the store gets to carry the entire burden. they're the ones that stick all the sales tax.

>> host: jerry cerasale, is unreasonable to ask sales payers to collect all these taxes? >> guest: well, the supreme court says yes. it's a burden on interstate commerce because it is so complicated. and estella so complicated. there are 7500 tax in the united states. by what many before scott's group started in there that many now. and what is taxable and is defined as taxation has all changed. and the point is that these are out-of-state. it's not all internet sales and are not collected for her. it is from a company that has no precedence within the state. so they have no employees, no facilities in that state. they have no political power in the state. they get none of the benefit from any of the schools, fire,

police. yet they are being asked to become unpaid tax collect collectors. and we think that it's not fair. we think that puts a burden on them, an unfair burden on them. the taxes due in the states do everything to collect taxes from internet and from catalog sales as well, for remote sales is probably a better way to say it. alabama just sent out a letter to everyone in the receipt they think one third of the people who received the letter sent back and statements. other states have things on air, land lines on their income tax. there are ways to try for states to look at this, rather than throwing an expensive version upon internet and remote marketers. >> host: mr. peterson, what is your response to that? >> guest: thank you.

jerry is correct that they still don't have that authority today. we think everyone has an obligation. you're doing business business in the state in the concept of a physical presence doesn't really have the same meaning as it did back in 1992 and the first time they did this in 1967 simply because it was so much easier to do business today than before. fedex and ups and what remains of the post office make connecting business in this country extremely easy. i mean, you don't have to own the merchandise to sell anymore. you don't have to do almost anything to be a retailer today. in 25 years ago that was the case. if you wanted to be retailer 25 years ago you had to put the money in, by the inventory, keep people employed and that's not the same now. i mean, there are companies who specialize in fulfillment.

i can give you 25% of my sales and you'll own all my inventory. you will be 100% responsible for shipping inventory. all you have to do is send sales to you and you'll do everything else. you can sit in your office in downtown minneapolis and sell all over the united states and never leave your office, never actually even own a merchandise that you're selling. the world has changed and we think the tax obligation should follow the change. >> are their software passages now that sales-tax collection -- i think they cost a little bit of money. >> guest: they do cost money and some of them work and they work for certain extent. but think about it in the following way. you have to change your ip. so the expenses are very high. so the same issues of the supreme court brief in the case before remain on the cost of trying to do business.

plus they haven't eliminated the need for some audits. if you're going to believe what i think you and so forth, some states are going to audit and so you have to get a tax in your business or wherever it is. so that's a huge, huge issue. you also have tax holidays. in florida there is a tax holiday at some point. i don't know where it is for hurricane preparedness or you can buy some of those things online or from a catalog. so you have to certainly know the dates of what you purchase. and you have things in tax holidays. massachusetts has a tax holiday. some states enough for certain items than others. but as another complication to it and states are constantly doing it. i think in answer to scott from the point of view of it so easy

to become a national or international marketer, it is probably time for the patent code to grow as well and become realized that they're changing. and they're starting. we don't think they've gone far enough. but that is the key as well. i don't think the states should set their say no, well things have changed and so therefore businesses have to pile up all these extra expenses and get a tax department and tax lawyers to learn and worry about what can be collect good in the right collection and getting enough to the right place. and the states not do anything to change this tax code that based upon political boundaries, which are becoming less and less

relevant to an extent in today's marketplace. >> but is it fair to say that there are software packages out today that weren't there in 1992 and the supreme court made the decision -- it may still be a little bit out of the way to collect those taxes, but it's probably quite a bit less than it was in 92. >> guest: yeah, i think those taxes probably weren't there before, weren't there in 92. that's for sure. but there were a lot more marketers out there now, small marketers, entrepreneurs coming and trying to make sales. i think that the burden is probably even greater, even with the packages because there's so many more marketers. the world has changed. and you know, if you really simplify the sales tax would be

very different discussion we have as we're talking i'm not the taxes, but the collections and how you collect that. >> in most cases come most of the proposals i've seen set a limit on how the limits would have to collect taxes. >> guest: we will start up with the accent and it's if you go with the startup, the level is not as low as you think to try when you have new businesses coming into the marketplace. >> host: this is c-span's "the communicators" program. we are disgusting sales tax on internet sales. our guests are scott peterson of the streamlined sales tax association and jerry cerasale of the direct marketing association. grant gross of idg new service. they sent him a sunny bill. what was that about? >> guest: it's about a

fulfillment center that has an affiliate of amazon and the state of texas. and generally is a physical presence test that has been created. you have an obligation to collect sales tax. we have spent the last 40 years trying to figure out what physical presence means. and we've been to court a thousand times i suppose trying to figure that out. as i understand it, i have not checked on amazon, but david distribution sorting or they have an affiliate that has a facility in texas that texas now believes creates a physical presence for amazon. now that they have at present there, amazon has the obligation of sales-tax. and as i understand on a going forward basis, but taxes on look back a little bit, too and collect some of the taxes they haven't. >> host: it was a bill for

$269 billion. >> guest: if not more. >> host: what is the current status for that? >> guest: i think they're going to need a court. >> guest: and it's really a question -- it is a corporate law question as to whether or not there is enough ownership or whatever in the fulfillment center and does not create the nexus where taxes do and the number is amazon hadn't been collecting and putting in the taxes. and if in fact they lose, there is -- that tax obligation will come straight out of the amazon because i purchased a day while back and he didn't collect the taxes. cannot think amazon will go back and collect the taxes. >> host: what is your view on that issue? >> guest: is a corporate law issue. if amazon has the presence in texas, the lot is pretty

straightforward. there is an obligation for you because you're an in-state retailer know and you received all the benefits and you have to become a tax collector for the state of texas and you have to collect those taxes and remiss the proper taxes to the department of revenue or whatever the exact title is in taxes. >> guest: one of the arguments recently against collecting sales tax has been the economy and right now the economy is sluggish. e-commerce is one of the areas that seems to be doing quite well, but you kind of risk slowing it down if you start collecting these sales taxes. what would you say to that? >> guest: 90% of the households in this country of broadband access, so the internet is no longer a baby. it is a very mature adult right

now. i don't know a soul that intentionally looks for places that don't charge themselves tax. it may not be true. they may not be because i don't know many people are don't have spent. i'll talk to too many people about their budget. but i don't believe having to collect sales tax is going to impact anybody sales. now, you can make an argument that because i don't have to charge sales tax the day that i have an advantage over someone else and i know lots of main street retailers are being disadvantaged. but if everybody has to collect, but the issue of whether or not there's a competitive advantage for one over another takes it away. it would be in exactly the same position. as revenue chill.