[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3179 Introduced in House (IH)]
112th CONGRESS
1st Session
H. R. 3179
To improve the States' rights to enforce the collection of State sales
and use tax laws, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
October 13, 2011
Mr. Womack (for himself, Ms. Speier, Mr. Poe of Texas, Mr. Diaz-Balart,
Mr. Ross of Florida, Mrs. Maloney, Mr. Welch, Ms. McCollum, Mr. Duncan
of Tennessee, and Mr. Miller of North Carolina) introduced the
following bill; which was referred to the Committee on the Judiciary
_______________________________________________________________________
A BILL
To improve the States' rights to enforce the collection of State 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 Equity Act of 2011''.
SEC. 2. AUTHORIZATION FOR STATES TO REQUIRE COLLECTION OF SALES AND USE
TAXES.
(a) Grant of Authority.--Notwithstanding any other provision of
law, a State electing, individually or through an agreement with one or
more of the several States, to satisfy the requirements of subsection
(b) 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 into the State without regard to the location of the
seller.
(b) Requirements for Authority.--The authorization provided under
paragraph (1) shall be granted once the State implements a simplified
system for administration of sales and use tax collection with respect
to remote sellers, which includes the following minimum requirements:
(1) Small seller exception.--An exception for remote
sellers with gross annual receipts in the preceding calendar
year from remote sales of items, services, and other products
in the United States not exceeding $1,000,000 (or such greater
amount as determined by the State involved) or in the State not
exceeding $100,000 (or such greater amount as determined by the
State).
(2) Form and filing.--A sales and use tax return for use by
remote sellers and a single revenue authority within the State
with which remote sellers are required to file the return. A
State may not require that remote sellers submit any other
sales and use tax return other than the sales and use tax
return applicable to remote sellers. A remote seller may not be
required to file sales and use tax returns any more frequently
than returns are required for other sellers. No local
jurisdiction may require a remote seller to submit a sales and
use tax return or to collect sales and use tax other than as
provided by this paragraph.
(3) Definition of tax base.--With respect to remote
sellers--
(A) products and services subject to tax must be
identical throughout the State, and
(B) any exemptions must be identical throughout the
State and may not include exemptions for products and
services that are not exempt when sold by other than
remote sellers.
(4) Sales and use tax rate structure.--
(A) Except as provided in subparagraph (B) of this
paragraph, remote sellers must collect sales and use
tax under one of three rate structures--
(i) a single State-wide blended rate that
includes both the State rate and applicable
rates of local jurisdictions, as determined by
the State;
(ii) the maximum State rate, which is the
highest rate at which sellers are required by
the State to collect tax, exclusive of tax
imposed by or for the specific benefit of local
jurisdictions; or
(iii) the applicable destination rate,
which is the sum of the State rate and any
applicable rate for the local jurisdiction into
which the sale was made. If a State requires
that remote sellers collect at the applicable
destination rate, the State must make available
adequate software to remote sellers that
substantially eases the burden of collecting at
multiple rates within the State, and any State
providing such software must relieve remote
sellers from liability to that State for
collection of the incorrect amount of sales or
use tax, including any penalties or interest,
provided that collection of the improper amount
is the result of relying on information
provided by that State.
(B) A State that generally imposes a lower sales
and use tax rate for sales of food or drugs and
medicine, or both, may require remote sellers to
collect sales and use tax at such rates.
(C) The rates described in clause (i) and (ii) must
not exceed the respective average State and locality
rates applicable to sellers other than remote sellers.
(c) Commencement of Authority.--
(1) In general.--A State satisfying the requirements of
subsection (b) may exercise the authority granted in subsection
(a) beginning on the first day of the calendar quarter at least
six months after the date that the State publishes the public
notice described in paragraph (2).
(2) Notice requirements.--The public notice required in
paragraph (1) must include the following information for remote
sellers:
(A) The title and reference to the legislation that
the State has enacted requiring remote sellers to
collect sales and use tax.
(B) The criteria under which remote sellers are
required to collect sales and use tax under the State
legislation.
(C) The rate or rates at which affected remote
sellers will be required to collect sales and use tax.
(D) The date upon which affected remote sellers
will be required to begin collecting sales and use tax.
(E) References to compliance information and the
form to be filed by remote sellers.
(d) Termination of Authority.--The authorization provided under
subsection (a) shall terminate for a State that no longer satisfies the
requirements of subsection (b) on the date that--
(1) a court of competent jurisdiction determines that the
State's simplified system of administration no longer meets the
minimum requirements set forth in subsection (b); and
(2) the determination of such court is no longer subject to
appeal.
SEC. 3. PREEMPTION.
Except as otherwise provided in this Act, this Act shall not be
construed to preempt or limit any power exercised or to be exercised by
a State or local jurisdiction under the law of such State or local
jurisdiction or under any other Federal law.
SEC. 4. LIMITATIONS.
(a) In General.--Nothing in this Act shall be construed as--
(1) subjecting a seller to franchise taxes, income taxes,
or licensing requirements of a State or political subdivision
thereof;
(2) affecting the application of such taxes or requirements
or enlarging or reducing the authority of any State to impose
such taxes or requirements;
(3) requiring any State or any local taxing jurisdiction to
exempt, or to impose a tax on any product, or to adopt any
particular type of tax, or to impose the same rate of tax as
any other taxing jurisdiction; or
(4) permitting or prohibiting a State from--
(A) licensing or regulating any person;
(B) requiring any person to qualify to transact
intrastate business;
(C) subjecting any person to State taxes not
related to the sale of goods or services; or
(D) exercising authority over matters of interstate
commerce.
(b) No Effect on Nexus.--No obligation imposed by virtue of the
authority granted by section 2 shall be considered in determining
whether a seller has a nexus with any State for any other tax purpose.
SEC. 5. DEFINITIONS.
For purposes of this Act, the following definitions shall apply:
(1) 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, any other
territory or possession of the United States, and any Indian
country as defined in section 1151 of title 18 of the United
States Code.
(2) Local jurisdiction.--The term ``local jurisdiction''
means any political subdivision of a State.
(3) Person.--The term ``person'' means an individual,
trust, estate, fiduciary, partnership, corporation, limited
liability company, or any other legal entity, and includes a
State or local government.
(4) Sale into the state.--The term ``sale into the State''
means a sale where the item sold is received by the purchaser
in the State, based on the location indicated by instructions
for delivery that the purchaser furnishes to the seller. When
no delivery location is specified, the sale occurs in the State
if the customer's billing address is in the State.
(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 the law existing on the day before the date of the
enactment of this Act so as to allow such State to require,
without regard to the authority granted by this Act, the seller
to collect and remit taxes covered by this Act with respect to
such sale.
(6) Remote seller.--The term ``remote seller'' means a
person that makes remote sales.
(7) Sales tax.--The term ``sales tax'' means a tax that
is--
(A) imposed on or incident to the sale of tangible
or intangible personal property or services as may be
defined or specified under the laws imposing such tax;
and
(B) measured by the amount of the sales price,
cost, charge, or other value of or for such property or
services.
(8) Use tax.--The term ``use tax'' means a tax that is--
(A) imposed on the purchase, storage, consumption,
distribution, or other use of tangible or intangible
personal property or services as may be defined or
specified under the laws imposing such tax; and
(B) measured by the purchase price of such property
or services.
SEC. 6. 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.
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