[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4462 Introduced in House (IH)]







106th CONGRESS
  2d Session
                                H. R. 4462

To provide for the simplification of sales and use taxes on interstate 
     commerce and to ensure that such taxes are equitably applied.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 16, 2000

Mr. Bachus (for himself, Ms. McCarthy of Missouri, Mr. Istook, and Mr. 
  Delahunt) introduced the following bill; which was referred to the 
Committee on the Judiciary, and in addition to the Committee on Rules, 
for a period to be subsequently determined by the Speaker, in each case 
for consideration of such provisions as fall within the jurisdiction of 
                        the committee concerned

_______________________________________________________________________

                                 A BILL


 
To provide for the simplification of sales and use taxes on interstate 
     commerce and to ensure that such taxes are equitably applied.

    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 ``Fair and Equitable Interstate Tax 
Compact Simplification Act of 2000''.

SEC. 2. FINDINGS.

    The Congress finds that--
            (1) the moratorium of the Internet Tax Freedom Act on new 
        taxes on Internet access and on multiple and discriminatory 
        taxes on electronic commerce should be extended;
            (2) States should be encouraged to simplify their sales and 
        use tax systems;
            (3) as a matter of economic policy and basic fairness, 
        similar sales transactions should be treated equitably, without 
        regard to the manner in which the sales are transacted, whether 
        in person, through the mails, over the telephone, on the 
        Internet, or by other means;
            (4) Congress may facilitate such equitable taxation 
        consistent with the Supreme Court's decision in Quill Corp. v. 
        North Dakota, 502 U.S. 808 (1992), which based its decision not 
        to extend States' collection powers in significant part on its 
        view that Congress has, by virtue of its constitutional power 
        to regulate interstate commerce, the ability to authorize 
        States to require out-of-State sellers to collect taxes on 
        sales to in-State residents;
            (5) States that adequately simplify their tax systems 
        should be authorized to correct the present inequities in 
        taxation by requiring sellers to collect taxes on sales of 
        goods or services delivered in-State, without regard to the 
        location of the seller or to the means by which the good or 
        service is sold;
            (6) the States have experience, expertise, and a vital 
        interest in the collection of sales and use taxes, and thus 
        should take the lead in developing and implementing sales and 
        use tax collection systems that are fair, efficient, and 
        nondiscriminatory in their application;
            (7) States, by their own initiative, have formed the 
        Streamlined Sales Tax System Project, a cooperative effort with 
        local governments to radically simplify the sales and use tax 
        system by bringing uniformity to tax bases, definitions, and 
        administration, by simplifying the tax rate structure and 
        administration, and by incorporating stringent privacy controls 
        and technology into the collection process to preserve the 
        basic tenets of consumer privacy, and that such project should 
        be allowed to proceed without intervention by Congress; and
            (8) online consumer privacy is of paramount importance to 
        the growth of electronic commerce and must be protected.

SEC. 3. EXTENSION OF INTERNET TAX FREEDOM ACT MORATORIUM THROUGH 2006.

    Section 1101(a) of the Internet Tax Freedom Act (47 U.S.C. 151 
note) is amended by striking ``3 years after the date of the enactment 
of this Act--'' and inserting ``on October 21, 2006:''.

SEC. 4. STREAMLINED SALES AND USE TAX SYSTEM.

    (a) Development of Streamlined System.--It is the sense of the 
Congress that States and localities should work together to develop a 
streamlined sales and use tax system that addresses the following:
            (1) A centralized, one-stop, multi-state registration 
        system for sellers.
            (2) Uniform definitions for goods or services that may be 
        included in the tax base.
            (3) Uniform and simple rules for attributing transactions 
        to particular taxing jurisdictions.
            (4) Uniform rules for the designation and identification of 
        purchasers exempt from sales and use taxes, including a 
        database of all exempt entities and a rule ensuring that 
        reliance on such database shall immunize sellers from 
        liability.
            (5) Uniform procedures for the certification of software 
        that sellers rely on to determine State and local use tax rates 
        and taxability.
            (6) Uniform bad debt rules.
            (7) Uniform tax returns and remittance forms.
            (8) Consistent electronic filing and remittance methods.
            (9) State administration of all State and local sales 
        taxes.
            (10) Uniform audit procedures.
            (11) Reasonable compensation for sellers for tax collection 
        obligations that reflects the complexity of an individual 
        State's tax structure, including the structure of its local 
        taxes.
            (12) Exemption from use tax collection requirements for 
        remote sellers falling below a specified de minimis threshold.
            (13) Appropriate protections for consumer privacy.
            (14) Such other features that the member States deem 
        warranted to promote simplicity, uniformity, neutrality, 
        efficiency, and fairness.
    (b) No Undue Burden.--Congress finds that if States adopt the 
streamlined system described in subsection (a), such a system does not 
place an undue burden on interstate commerce or burden the growth of 
electronic commerce and related technologies in any material way.

SEC. 5. INTERSTATE SALES AND USE TAX COMPACT.

    (a) Authorization and Consent.--States are authorized to enter into 
an Interstate Sales and Use Tax Compact, and Congress hereby consents 
to such a compact. The Compact shall provide that member States agree 
to adopt a uniform, streamlined sales and use tax system consistent 
with section 4(a).
    (b) Expiration.--The authorization and consent in subsection (a) 
shall automatically expire if the Compact has not been formed before 
January 1, 2004.

SEC. 6. AUTHORIZATION TO SIMPLIFY STATE USE TAX RATES THROUGH 
              AVERAGING.

    Notwithstanding any other provision of law, any State levying a 
sales tax is authorized to administer a single uniform statewide use 
tax rate relating to all remote sales on which it assesses a use tax, 
provided that for each calendar year in which such statewide rate is 
applicable, if such rate had been assessed during the second calendar 
year prior to such year on all such sales on which a sales tax was 
assessed by such State or its local jurisdictions, the total taxes 
assessed on such sales would not have exceeded the total taxes actually 
assessed on such sales during such year.

SEC. 7. AUTHORIZATION TO REQUIRE COLLECTION OF USE TAXES.

    (a) Grant of Authority.--Subject to the limitations in subsection 
(b), any member State that has adopted and participates in the 
streamlined system prescribed by the Compact is authorized, 
notwithstanding any other provision of law, to require all sellers not 
qualifying for the de minimis exception specified in such system to 
collect and remit use taxes on remote sales in such State.
    (b) Conditions.--The authority in subsection (a) shall be of no 
effect unless all of the following conditions are met:
            (1) The streamlined system prescribed by the Compact has 
        been submitted to the President of the United States prior to 
        January 31, 2004, with the approval of at least 20 member 
        States.
            (2) The President has submitted a report to the Congress 
        certifying that the streamlined system prescribed by the 
        Compact satisfies the requirements of section 4(a).
            (3) 90 days have passed from the date of the submission of 
        the report to Congress under paragraph (2), and no joint 
        resolution disapproving the system has been enacted pursuant to 
        the procedures in subsection (c).
    (c) Procedure for Joint Resolution of Disapproval.--A joint 
resolution disapproving the streamlined system prescribed by the 
Compact may be enacted no later than 90 days from the date of the 
submission of the report to Congress under subsection (b)(2). Such 
submission and such 90-day period shall be governed by the provision of 
section 2194 of title 19, United States Code. Consideration of such 
joint resolution shall be pursuant to the expedited procedures 
prescribed in section 2192 of title 19, United States Code, with the 
following modifications:
            (1) Sections 2192(b) and 2192(f)(1)(a)(i) shall be 
        inapplicable.
            (2) Section 2192(a) shall be inapplicable, and shall for 
        purposes of this section be replaced by the following:
    ``(a) Contents of Resolution.--For purposes of this section, the 
term `resolution' means only a joint resolution of the 2 Houses of the 
Congress, the matter after the resolving clause of which is as follows: 
`That the Congress does not approve of the determination of the 
President under section 7(b)(2) of the Fair and Equitable Interstate 
Tax Compact Simplification Act of 2000 transmitted on ____.', the blank 
space being filled with the appropriate date.''.
            (3) Section 2192(f)(3) shall be applicable in the case of a 
        veto message with respect to any joint resolution under this 
        section.

SEC. 8. LIMITATIONS.

    (a) No Effect on Nexus.--No obligation imposed by virtue of 
authority granted in section 7(a) shall be considered in determining 
whether a seller has a nexus with any State for any tax purpose.
    (b) No Effect on Licensing, Regulation, Etc.--Nothing in this Act 
shall be construed to permit a State to license or regulate any person, 
to require any person to qualify to transact intrastate business, or to 
subject any person to State taxes not related to the sales of tangible 
personal property.

SEC. 9. DEFINITIONS.

    For purposes of this Act--
            (1) the term ``State'' means 1 of the 50 States of the 
        United States and the District of Columbia;
            (2) the term ``the Compact'' means the Interstate Sales and 
        Use Tax Compact authorized by section 5;
            (3) the term ``goods or services'' includes any tangible or 
        intangible personal property and services;
            (4) the term ``member State'' means a State that has joined 
        the Compact;
            (5) the term ``remote sale'' means a sale in interstate 
        commerce of goods or services attributed, under the rules of 
        section 4(a)(3) of this Act, to a particular taxing 
        jurisdiction which jurisdiction could not, except for the 
        authority granted by this Act, require the seller of such goods 
        or services to collect and remit sales or use taxes on such 
        sale;
            (6) a remote sale ``in'' a particular taxing jurisdiction 
        means a remote sale of goods or services attributed, under the 
        rules of section 4(a)(3) of this Act, to a particular taxing 
        jurisdiction;
            (7) the term ``seller'' means a seller of goods or 
        services; and
            (8) the term ``uniform'' refers to interstate uniformity.
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