[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 1832 Introduced in Senate (IS)]
112th CONGRESS
1st Session
S. 1832
To restore States' sovereign rights to enforce State and local sales
and use tax laws, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
November 9, 2011
Mr. Enzi (for himself, Mr. Durbin, Mr. Alexander, Mr. Johnson of South
Dakota, Mr. Boozman, Mr. Reed, Mr. Blunt, Mr. Whitehouse, Mr. Corker,
and Mr. Pryor) introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To restore States' sovereign rights to enforce State and local sales
and use tax laws, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Marketplace Fairness Act''.
SEC. 2. SENSE OF CONGRESS.
It is the sense of Congress that States should have the ability to
enforce their existing sales and use tax laws and to treat similar
sales transactions equally, without regard to the manner in which the
sale is transacted, and the right to collect--or decide not to
collect--taxes that are already owed under State law.
SEC. 3. AUTHORIZATION TO REQUIRE COLLECTION OF SALES AND USE TAXES.
(a) Streamlined Sales and Use Tax Agreement.--Each Member State
under the Streamlined Sales and Use Tax Agreement is authorized to
require all sellers not qualifying for a small seller exception to
collect and remit sales and use taxes with respect to remote sales
sourced to that Member State pursuant to the provisions of the
Streamlined Sales and Use Tax Agreement. Such authority shall commence
beginning no earlier than the first day of the calendar quarter that is
at least 90 days after the date of the enactment of this Act.
(b) Alternative.--
(1) In general.--A State that is not a Member State under
the Streamlined Sales and Use Tax Agreement is authorized to
require all sellers not qualifying for the small seller
exception to collect and remit sales and use taxes with respect
to remote sales sourced to that State, but only if the State
adopts and implements minimum simplification requirements. Such
authority shall commence beginning no earlier than the first
day of the calendar quarter that is at least 6 months after the
date that the State enacts legislation to implement each of the
following minimum simplification requirements:
(A) Provide--
(i) a single State-level agency to
administer all sales and use tax laws,
including the collection and administration of
all State and applicable locality sales and use
taxes for all sales sourced to the State made
by remote sellers,
(ii) a single audit for all State and local
taxing jurisdictions within that State, and
(iii) a single sales and use tax return to
be used by remote sellers and single and
consolidated providers and to be filed with the
State-level agency.
(B) Provide a uniform sales and use tax base among
the State and the local taxing jurisdictions within the
State.
(C) Require remote sellers and single and
consolidated providers to collect sales and use taxes
pursuant to the applicable destination rate, which is
the sum of the applicable State rate and any applicable
rate for the local jurisdiction into which the sale is
made.
(D) Provide--
(i) adequate software and services to
remote sellers and single and consolidated
providers that identifies the applicable
destination rate, including the State and local
sales tax rate (if any), to be applied on sales
sourced to the State, and
(ii) certification procedures for both
single providers and consolidated providers to
make software and services available to remote
sellers, and hold such providers harmless for
any errors or omissions as a result of relying
on information provided by the State.
(E) Hold remote sellers using a single or
consolidated provider harmless for any errors and
omissions by that provider.
(F) Relieve remote sellers from liability to the
State or locality for collection of the incorrect
amount of sales or use tax, including any penalties or
interest, if collection of the improper amount is the
result of relying on information provided by the State.
(G) Provide remote sellers and single and
consolidated providers with 30 days notice of a rate
change by any locality in the State.
(2) Treatment of local rate changes.--For purposes of this
subsection, local rate changes may only be effective on the
first day of a calendar quarter. Failure to provide notice
under paragraph (1)(G) shall require the State and locality to
hold the remote seller or single or consolidated provider
harmless for collecting tax at the immediately preceding
effective rate during the 30-day period. Each State must
provide updated rate information as part of the software and
services required by paragraph (1)(D).
(c) Small Seller Exception.--A State shall be authorized to require
a remote seller, or a single or consolidated provider acting on behalf
of a remote seller, to collect sales or use tax under this Act if the
remote seller has gross annual receipts in total remote sales in the
United States in the preceding calendar year exceeding $500,000. For
purposes of determining whether the threshold in this subsection is
met, the sales of all persons related within the meaning of subsections
(b) and (c) of section 267 or section 707(b)(1) of the Internal Revenue
Code of 1986 shall be aggregated.
SEC. 4. TERMINATION OF AUTHORITY.
The authority granted by this Act shall terminate on the date that
the highest court of competent jurisdiction makes a final determination
that the State no longer meets the requirements of this Act, and the
determination of such court is no longer subject to appeal.
SEC. 5. LIMITATIONS.
(a) In General.--Nothing in this Act shall be construed as--
(1) subjecting a seller or any other person to franchise,
income, occupation, or any other type of taxes, other than
sales and use taxes,
(2) affecting the application of such taxes, or
(3) enlarging or reducing State authority to impose such
taxes.
(b) No Effect on Nexus.--No obligation imposed by virtue of the
authority granted by this Act shall be considered in determining
whether a seller or any other person has a nexus with any State for any
tax purpose other than sales and use taxes.
(c) Licensing and Regulatory Requirements.--Other than the
limitation set forth in subsection (a), and section 3, nothing in this
Act shall be construed as permitting or prohibiting a State from--
(1) licensing or regulating any person,
(2) requiring any person to qualify to transact intrastate
business,
(3) subjecting any person to State taxes not related to the
sale of goods or services, or
(4) exercising authority over matters of interstate
commerce.
(d) No New Taxes.--Nothing in this Act shall be construed as
encouraging a State to impose sales and use taxes on any goods or
services not subject to taxation prior to the date of the enactment of
this Act.
(e) Intrastate Sales.--The provisions of this Act shall only apply
to remote sales and shall not apply to intrastate sales or intrastate
sourcing rules. States granted authority under section 3(a) shall
comply with the intrastate provisions of the Streamlined Sales and Use
Tax Agreement.
SEC. 6. DEFINITIONS AND SPECIAL RULES.
In this Act:
(1) Consolidated provider.--The term ``consolidated
provider'' means any person certified by a State who has the
rights and responsibilities for sales and use tax
administration, collection, remittance, and audits for
transactions serviced or processed for the sale of goods or
services made by remote sellers on an aggregated basis.
(2) Locality; local.--The terms ``locality'' and ``local''
refer to any political subdivision of a State.
(3) Member state.--The term ``Member State''--
(A) means a Member State as that term is used under
the Streamlined Sales and Use Tax Agreement as in
effect on the date of the enactment of this Act, and
(B) does not include any associate member under the
Streamlined Sales and Use Tax Agreement.
(4) Person.--The term ``person'' means an individual,
trust, estate, fiduciary, partnership, corporation, limited
liability company, or other legal entity, and a State or local
government.
(5) Remote sale.--The term ``remote sale'' means a sale of
goods or services attributed to a State with respect to which a
seller does not have adequate physical presence to establish
nexus under Quill Corp. v. North Dakota, 504 U.S. 298 (1992).
(6) Remote seller.--The term ``remote seller'' means a
person that makes remote sales.
(7) Single provider.--The term ``single provider'' means
any person certified by a State who has the rights and
responsibilities for sales and use tax administration,
collection, remittance, and audits for transactions serviced or
processed for the sale of goods or services made by remote
sellers.
(8) Sourced.--For purposes of a State granted authority
under section 3(b), the location to which a remote sale is
sourced refers to the location where the item sold is received
by the purchaser, based on the location indicated by
instructions for delivery that the purchaser furnishes to the
seller. When no delivery location is specified, the remote sale
is sourced to the customer's address that is either known to
the seller or, if not known, obtained by the seller during the
consummation of the transaction, including the address of the
customer's payment instrument if no other address is available.
If an address is unknown and a billing address cannot be
obtained, the remote sale is sourced to the address of the
seller from which the remote sale was made. A State granted
authority under section 3(a) shall comply with the sourcing
provisions of the Streamlined Sales and Use Tax Agreement.
(9) State.--The term ``State'' means each of the several
States, the District of Columbia, the Commonwealth of Puerto
Rico, Guam, American Samoa, the United States Virgin Islands,
the Commonwealth of the Northern Mariana Islands, and any other
territory or possession of the United States.
(10) Streamlined sales and use tax agreement.--The term
``Streamlined Sales and Use Tax Agreement'' means the multi-
State agreement with that title adopted on November 12, 2002,
as in effect on the date of the enactment of this Act and as
further amended from time to time.
SEC. 7. SEVERABILITY.
If any provision of this Act or the application of such provision
to any person or circumstance is held to be unconstitutional, the
remainder of this Act and the application of the provisions of such to
any person or circumstance shall not be affected thereby.
<all>