113 S2609 PCS: Marketplace and Internet Tax Fairness Act
U.S. Senate
2014-07-15
text/xml
EN
Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
1.
This Act may be cited as the
Marketplace and Internet Tax Fairness Act
.
<enum>I</enum><header>Marketplace Fairness</header><section commented="no" display-inline="no-display-inline" id="id73e3d3961b8347adbd536efc9f6d65b8" section-type="subsequent-section">
<enum>101.</enum>
<header display-inline="yes-display-inline">Authorization to require collection of
sales and use taxes</header>
<subsection commented="no" display-inline="no-display-inline" id="id1687abb6419a4f9ca0c6fe63b9026aba">
<enum>(a)</enum>
<header display-inline="yes-display-inline">Streamlined sales and use tax
agreement</header>
<text display-inline="yes-display-inline">Each Member State
under the Streamlined Sales and Use Tax Agreement is authorized to require
all
sellers not qualifying for the small seller exception described in
subsection
(c) 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, but only if any changes to the Streamlined
Sales
and Use Tax Agreement made after the date of the enactment of this Act are
not
in conflict with the minimum simplification requirements in subsection
(b)(2).
Subject to section 102(h), a State may exercise authority under this title
beginning 180 days after the
State publishes notice of the State’s intent to exercise the authority
under
this title.</text>
</subsection><subsection id="id8fca439ae5164026b18f644e7d4da55a">
<enum>(b)</enum>
<header>Alternative</header>
<text>A
State that is not a Member State under the Streamlined Sales and Use Tax
Agreement is authorized notwithstanding any other provision of law to
require
all sellers not qualifying for the small seller exception described in
subsection (c) 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
the
minimum simplification requirements in paragraph (2). Subject to section
102(h), 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—</text>
<paragraph id="id0c6a1fa0157f4d40bd7beea9e76d5550">
<enum>(1)</enum>
<text>enacts
legislation to exercise the authority granted by this title—</text>
<subparagraph id="id1e6afd32aee04a5cbabc56f2e5bcb404">
<enum>(A)</enum>
<text>specifying the
tax or taxes to which such authority and the minimum simplification
requirements in paragraph (2) shall apply; and</text>
</subparagraph><subparagraph id="ide121f591c9374982a3d2a7aa624a9bb3">
<enum>(B)</enum>
<text>specifying the
products and services otherwise subject to the tax or taxes identified by
the
State under subparagraph (A) to which the authority of this title shall
not
apply; and</text>
</subparagraph></paragraph><paragraph id="id3c37446ec308428dbde63e893d5b0906">
<enum>(2)</enum>
<text>implements each
of the following minimum simplification requirements:</text>
<subparagraph id="idc7a7a2bdc7c24b44aa1f6c1ba9523fea">
<enum>(A)</enum>
<text>Provide, with respect to all remote sales sourced to the State—</text>
<clause id="idd64bfaaa8f6741729a4df39cdecb4b9e">
<enum>(i)</enum>
<text>a
single entity within the State responsible for all State and local sales
and
use tax administration, return processing, and audits;</text>
</clause><clause id="id9674a008ffcf4a06b4dacc8706ebf3a0">
<enum>(ii)</enum>
<text>a
single audit of a remote seller for all State and local taxing
jurisdictions
within that State; and</text>
</clause><clause id="idd57af6b3360949a8b148c31f06f9d4a0">
<enum>(iii)</enum>
<text>a
single sales and use tax return to be used by remote sellers to be filed
with
the single entity responsible for tax administration.</text>
</clause><continuation-text continuation-text-level="subparagraph">A State
may not require a remote seller to file sales and use tax returns any more
frequently than returns are required for nonremote sellers or impose
requirements on remote sellers that the State does not impose on nonremote
sellers with respect to the collection of sales and use taxes under this
title.
No local jurisdiction may require a remote seller to submit a sales and
use tax
return or to collect sales and use taxes other than as provided by this
paragraph.</continuation-text></subparagraph><subparagraph id="id32c70cbc30334d2dac961076bf64a0fd">
<enum>(B)</enum>
<text>Provide a uniform
sales and use tax base among the State and the local taxing jurisdictions
within the State with respect to products and services to which paragraph
(1)(B) does not apply.</text>
</subparagraph><subparagraph id="idf08fef202c9040e49316071c1be81cf4">
<enum>(C)</enum>
<text>Source all remote
sales in compliance with the sourcing definition set forth in section
103(7).</text>
</subparagraph><subparagraph id="idd52cda5cdb314ce98238955fa887894b">
<enum>(D)</enum><clause commented="no" display-inline="yes-display-inline" id="idB64C6664F0794FA08DC9242B1FDA677A"><enum>(i)</enum>
<text>Make publicly available information
indicating the taxability of products and services along with any product
and
service exemptions from sales and use tax in the State and a rates and
boundary
database.</text></clause><clause id="id02815598523D4CF0B3BEDB42EFB7C15D" indent="up1"><enum>(ii)</enum><text>Provide software free of
charge for remote sellers that calculates sales and use taxes due on each
transaction at the time the transaction is completed, that files sales and
use
tax returns, and that is updated to reflect any rate changes and any
changes to the products and services specified under paragraph (1)(B), as
described in
subparagraph (H); and</text></clause><clause id="idF2B8070E428B4595A6217B4E44C077E3" indent="up1"><enum>(iii)</enum><text>Establish certification
procedures for persons to be approved as certified software providers,
with any software provided by such
providers
to be capable of calculating and filing sales and use taxes in all
States
qualified under this title.</text></clause></subparagraph><subparagraph id="idf2fa860c04b44ecd988b092fcd08cf91">
<enum>(E)</enum>
<text>Relieve remote
sellers from liability to the State or locality for the incorrect
collection,
remittance, or noncollection of sales and use taxes, including any
penalties or
interest, if the liability is the result of an error or omission made by a
certified software provider.</text>
</subparagraph><subparagraph id="ida3bf8946555347c9830046b5f630cbfa">
<enum>(F)</enum>
<text>Relieve certified
software providers from liability to the State or locality for the
incorrect
collection, remittance, or noncollection of sales and use taxes, including
any
penalties or interest, if the liability is the result of misleading or
inaccurate information provided by a remote seller.</text>
</subparagraph><subparagraph id="id6f956057ca77492f8c171abe63acd5a1">
<enum>(G)</enum>
<text>Relieve remote
sellers and certified software providers from liability to the State or
locality for incorrect collection, remittance, or noncollection of sales
and
use taxes, including any penalties or interest, if the liability is the
result
of incorrect information or software provided by the State.</text>
</subparagraph><subparagraph id="id4a3e07fc11a541edadbd2277d02c7082">
<enum>(H)</enum>
<text>Provide remote
sellers and certified software providers with 90 days notice of any rate
change or any change to the products and services specified under
paragraph (1)(B)
by the State or any locality in the State and update the information
described
in subparagraph (D)(i) accordingly and relieve any remote seller or
certified
software provider from liability for collecting sales and use taxes at the
immediately preceding effective rate during the 90-day notice period if
the
required notice is not provided.</text>
</subparagraph></paragraph></subsection><subsection id="id0362CAC24BC749DFAD10403F7DA2D4AF"><enum>(c)</enum><header>Small seller
exception</header>
<text>A State is authorized to require a remote seller to
collect sales and use taxes under this title only if the remote seller has
gross
annual receipts in total remote sales in the United States in the
preceding
calendar year exceeding $1,000,000. For purposes of determining whether
the
threshold in this section is met, the gross annual receipts from remote
sales
of 2 or more persons shall be aggregated if—</text>
<paragraph id="idC634C245A7C0444380CF275885FFFB1D">
<enum>(1)</enum>
<text>such persons are
related to the remote seller within the meaning of subsections (b) and (c)
of
section 267 or <external-xref legal-doc="usc" parsable-cite="usc/26/707">section 707(b)(1)</external-xref> of the Internal Revenue Code of 1986;
or</text>
</paragraph><paragraph id="idE6D8308301424871865FC2726680F4C5">
<enum>(2)</enum>
<text>such persons have
1 or more ownership relationships and such relationships were designed
with a
principal purpose of avoiding the application of these rules.</text>
</paragraph></subsection></section><section id="idfb17e8a5fe9447a3a75be7c3c10a513d">
<enum>102.</enum>
<header>Limitations</header>
<subsection id="id9219f1d96bcb42a5bbbf6195fe56cfcb">
<enum>(a)</enum>
<header>In
general</header>
<text>Nothing in this title shall be construed as—</text>
<paragraph id="id5e631bfa70104c7e863cdadf444676e1">
<enum>(1)</enum>
<text>subjecting a
seller or any other person to franchise, income, occupation, or any other
type
of taxes, other than sales and use taxes;</text>
</paragraph><paragraph id="idfbfd8126f42b4a95ac8e2c9eed2c145a">
<enum>(2)</enum>
<text>affecting the
application of such taxes; or</text>
</paragraph><paragraph id="id1293b15ec1324e7eaf660982d467bbe7">
<enum>(3)</enum>
<text>enlarging or
reducing State authority to impose such taxes.</text>
</paragraph></subsection><subsection id="id52deb530c4cf4676a04fa3277f6607b0">
<enum>(b)</enum>
<header>No effect on
nexus</header>
<text>This title shall not be construed to create any nexus or
alter the standards for determining nexus between a person and a State or
locality.</text>
</subsection><subsection id="id16E25C6847514573BD573AECD34A75D2">
<enum>(c)</enum>
<header>No effect on
seller choice</header>
<text>Nothing in this title shall be construed to deny the
ability of a remote seller to deploy and utilize a certified software
provider
of the seller's choice.</text>
</subsection><subsection id="idbcaa098e5aa0493588e7989a00742e74">
<enum>(d)</enum>
<header>Licensing and
regulatory requirements</header>
<text>Nothing in this title shall be construed as
permitting or prohibiting a State from—</text>
<paragraph id="id227a7995c589429a89b217371b9b7349">
<enum>(1)</enum>
<text>licensing or
regulating any person;</text>
</paragraph><paragraph id="id40619d6f93534f959487119f5f935f2e">
<enum>(2)</enum>
<text>requiring any
person to qualify to transact intrastate business;</text>
</paragraph><paragraph id="id8f637e0f372f4b8da4fbbd2735cd56aa">
<enum>(3)</enum>
<text>subjecting any
person to State or local taxes not related to the sale of products or
services;
or</text>
</paragraph><paragraph id="id7330ee216be740509e342cc2632bd55f">
<enum>(4)</enum>
<text>exercising
authority over matters of interstate commerce.</text>
</paragraph></subsection><subsection id="idba5a9e46843544f8857ca0b7906f9f9b">
<enum>(e)</enum>
<header>No new
taxes</header>
<text>Nothing in this title shall be construed as encouraging a
State to impose sales and use taxes on any products or services not
subject to
taxation prior to the date of the enactment of this Act.</text>
</subsection><subsection id="id68381C0EBAE8469A81B569B006F8F3E9">
<enum>(f)</enum>
<header>No effect on
intrastate sales</header>
<text>The provisions of this title shall apply only to
remote sales and shall not apply to intrastate sales or intrastate
sourcing
rules. States granted authority under section 101(a) shall comply with all
intrastate provisions of the Streamlined Sales and Use Tax Agreement.</text>
</subsection><subsection id="idaffd70c0927643939d28b1f1315ba6c6">
<enum>(g)</enum>
<header>No effect on
Mobile Telecommunications Sourcing Act</header>
<text>Nothing in this title shall
be construed as altering in any manner or preempting the Mobile
Telecommunications Sourcing Act (<external-xref legal-doc="usc" parsable-cite="usc/4/116">4 U.S.C. 116–126</external-xref>).</text>
</subsection><subsection id="id37B4A7F9EA514274B43B6C0D437D72A2"><enum>(h)</enum><header>Limitation on initial collection of sales and use taxes from remote sales</header><text>A State may not begin to exercise the authority under this title—</text><paragraph id="idC1B5F3E41FE54EDE809EEC41EDFC6F8D"><enum>(1)</enum><text>before the date that is 1 year after the date of the enactment of this Act; and</text></paragraph><paragraph id="idC2CD21C948C04A9F86EAAD1330550DBF"><enum>(2)</enum><text>during the period beginning October 1 and ending on December 31 of the first calendar year
beginning after the date of the enactment of this Act.</text></paragraph></subsection></section><section id="id105ae98d7b74481d84f37466ba0f693f">
<enum>103.</enum>
<header>Definitions and
special rules</header>
<text display-inline="no-display-inline">In this
title:</text>
<paragraph id="id1f5c884b161f471aabaf7c8772f7c55c">
<enum>(1)</enum>
<header>Certified
software provider</header>
<text>The term <term>certified software
provider</term> means a person that—</text>
<subparagraph id="id0F3EEB1385834FFDBD1D9B91438938F3">
<enum>(A)</enum>
<text>provides software
to remote sellers to facilitate State and local sales and use tax
compliance
pursuant to section 101(b)(2)(D)(ii); and</text>
</subparagraph><subparagraph id="id528868AB7BE24AB2A00D32D6D6C68CC2">
<enum>(B)</enum>
<text>is certified by a
State to so provide such software.</text>
</subparagraph></paragraph><paragraph id="id3b5f9e3cfafa44dcbdcfa8e94f62afc1">
<enum>(2)</enum>
<header>Locality;
local</header>
<text>The terms <term>locality</term> and <term>local</term>
refer to any political subdivision of a State.</text>
</paragraph><paragraph id="id93b9ac7ffa6a4729bbdb086e75834c92">
<enum>(3)</enum>
<header>Member
State</header>
<text>The term <term>Member State</term>—</text>
<subparagraph id="id5f2536eacdca4cdc815684b4637587d2">
<enum>(A)</enum>
<text>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</text>
</subparagraph><subparagraph id="idb1ba02789d874644b9288f245dec0907">
<enum>(B)</enum>
<text>does not include
any associate member under the Streamlined Sales and Use Tax Agreement.</text>
</subparagraph></paragraph><paragraph id="id6ab216bc287144acbf2ff408053743e3">
<enum>(4)</enum>
<header>Person</header>
<text>The
term <term>person</term> means an individual, trust, estate, fiduciary,
partnership, corporation, limited liability company, or other legal
entity, and
a State or local government.</text>
</paragraph><paragraph id="id87a1cef1aacd46df96aead062c4bc097">
<enum>(5)</enum>
<header>Remote
sale</header>
<text>The term <term>remote sale</term> means a sale into a State,
as determined under the sourcing rules under paragraph (7), in which the
seller
would not legally be required to pay, collect, or remit State or local
sales
and use taxes unless provided by this title.</text>
</paragraph><paragraph id="idad63d31a8cf24570b3e1d4a835db9562">
<enum>(6)</enum>
<header>Remote
seller</header>
<text>The term <term>remote seller</term> means a person that
makes remote sales in the State.</text>
</paragraph><paragraph id="id77bb7c8dcbe54d9ea4e691852be263c9">
<enum>(7)</enum>
<header>Sourced</header>
<text>For
purposes of a State granted authority under section 101(b), the location
to
which
a remote sale is sourced refers to the location where the product or
service
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 101(a) shall comply with the sourcing
provisions
of the Streamlined Sales and Use Tax Agreement.</text>
</paragraph><paragraph id="id778b8a306574431cb58c0d995188c0f3">
<enum>(8)</enum>
<header>State</header>
<text>The
term <term>State</term> 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, and any tribal
organization (as defined in section 4 of the Indian Self-Determination and
Education Assistance Act (<external-xref legal-doc="usc" parsable-cite="usc/25/450b">25 U.S.C. 450b</external-xref>)).</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id54686f5e2236445e914eb09354554b71">
<enum>(9)</enum>
<header display-inline="yes-display-inline">Streamlined sales and use tax
agreement</header>
<text display-inline="yes-display-inline">The term
<term>Streamlined Sales and Use Tax Agreement</term> 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.</text>
</paragraph></section><section commented="no" display-inline="no-display-inline" id="id2C5ABBB6C8E949DAB43DE085FB803387" section-type="subsequent-section"><enum>104.</enum><header display-inline="yes-display-inline">Severability</header>
<text display-inline="no-display-inline">If any provision of this title or the
application of such provision to any person or circumstance is held to be
unconstitutional, the remainder of this title and the application of the
provisions of such to any person or circumstance shall not be affected
thereby.</text>
</section><section commented="no" display-inline="no-display-inline" id="id40fd34c8811d4a20aa26e96b972138a4" section-type="subsequent-section">
<enum>105.</enum>
<header display-inline="yes-display-inline">Preemption</header>
<text display-inline="no-display-inline">Except as otherwise provided in this title,
this title 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.</text>
</section><enum>II</enum><header>Internet Tax Freedom Act</header><section id="idACB39A6314E645AAB94C6204E4CA4C78"><enum>201.</enum><header>Extension of
Internet Tax Freedom Act</header>
<subsection id="id4E03B7CEFAD84D128FD34827DAC8CB9B"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Section 1101(a) of the
Internet Tax Freedom Act (<external-xref legal-doc="usc" parsable-cite="usc/47/151">47 U.S.C. 151</external-xref> note) is amended by striking
<quote>November 1, 2014</quote> and inserting <quote>November 1,
2024</quote>.</text>
</subsection><subsection id="idA975B4E448F24BA3A4A607DF12044B3F"><enum>(b)</enum><header>Grandfathering
of States that tax Internet access</header><text>Section 1104(a)(2)(A) of such
Act is amended by striking <quote>November 1, 2014</quote> and inserting
<quote>November 1, 2024</quote>.</text></subsection></section>
July 16, 2014Read the second time and placed on the calendar