[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.
                                 <all>