1.This Act may be cited as the
Marketplace Equity Act of
2011
.
2.Authorization for
States to require collection of sales and use taxes
(a)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
authorityThe 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)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)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)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)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)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)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.
3.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.
4.
(a)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 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.
5.For purposes of this Act, the following
definitions shall apply:
(1)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)The term local jurisdiction
means any
political subdivision of a State.
(3)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)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)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)The term remote seller
means a person that
makes remote sales.
(7)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)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.
6.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.