Introduction of the Federal Gift Shop Tax Act

Floor Speech

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Ms. NORTON. Madam Speaker, today, I rise to introduce the Federal Gift Shop Tax Act, which would allow state and local governments to impose a sales tax at gift shops on federal property. These governments would be able to generate millions of dollars in new tax revenue.

When the federal government engages in activity that is not inherently governmental, such as operating a gift shop, there is no reason to exempt customer purchases from a sales tax. The items sold at federal gift shops, such as jewelry, apparel, accessories, games and books, would be subject to sales tax if sold on private property. Customers are often unaware of the exemption from sales tax at gift shops on federal property, so the introduction of a sales tax is unlikely to have a significant impact on gift shop sales. It would, however, create a valuable revenue stream for state and local governments. In addition, state and local governments often provide uncompensated services for federal property, such as fire service, and allowing them to impose a sales tax at gift shops on federal property would allow them to recoup some of these costs.

This bill is of particular importance to the District of Columbia, which is home to a number of gift shops on federal property, such as at the Smithsonian Institution, the National Gallery of Art and the John F. Kennedy Center for the Performing Arts.

I strongly urge my colleagues to support this bill.

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