[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[S. 336 Introduced in Senate (IS)]
113th CONGRESS
1st Session
S. 336
To restore States' sovereign rights to enforce State and local sales
and use tax laws, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
February 14, 2013
Mr. Enzi (for himself, Mr. Durbin, Mr. Alexander, Mr. Johnson of South
Dakota, Mr. Boozman, Mr. Reed, Mr. Blunt, Mr. Whitehouse, Mr. Corker,
Mr. Pryor, Mr. Rockefeller, Ms. Klobuchar, Mr. Franken, Ms. Heitkamp,
Mr. Cardin, Mrs. Feinstein, Ms. Landrieu, Mr. Manchin, Mr. Levin, and
Mr. Harkin) introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To restore States' sovereign rights to enforce State and local 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 Fairness Act of 2013''.
SEC. 2. AUTHORIZATION TO REQUIRE COLLECTION OF SALES AND USE TAXES.
(a) Streamlined Sales and Use Tax Agreement.--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 the Streamlined Sales and Use Tax Agreement includes the minimum
simplification requirements in subsection (b)(2). A State may exercise
authority under this Act beginning 90 days after the State publishes
notice of the State's intent to exercise the authority under this Act,
but no earlier than the first day of the calendar quarter that is at
least 90 days after the date of the enactment of this Act.
(b) Alternative.--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). 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--
(1) enacts legislation to exercise the authority granted by
this Act--
(A) specifying the tax or taxes to which such
authority and the minimum simplification requirements
in paragraph (2) shall apply; and
(B) 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
Act shall not apply; and
(2) implements each of the following minimum simplification
requirements:
(A) Provide--
(i) a single entity within the State
responsible for all State and local sales and
use tax administration, return processing, and
audits for remote sales sourced to the State;
(ii) a single audit of a remote seller for
all State and local taxing jurisdictions within
that State; and
(iii) a single sales and use tax return to
be used by remote sellers to be filed with the
single entity responsible for tax
administration.
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. 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.
(B) Provide a uniform sales and use tax base among
the State and the local taxing jurisdictions within the
State pursuant to paragraph (1).
(C) Source all interstate sales in compliance with
the sourcing definition set forth in section 4(7).
(D) Provide--
(i) 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;
(ii) 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 rate
changes as described in subparagraph (H); and
(iii) certification procedures for persons
to be approved as certified software providers.
For purposes of clause (iii), the software provided by
certified software providers shall be capable of
calculating and filing sales and use taxes in all
States qualified under this Act.
(E) 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.
(F) 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.
(G) 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.
(H) Provide remote sellers and certified software
providers with 90 days notice of a rate change 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.
(c) Small Seller Exception.--A State is authorized to require a
remote seller to collect sales and use taxes under this Act 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 subsection is
met--
(1) the sales of all persons related within the meaning of
subsections (b) and (c) of section 267 or section 707(b)(1) of
the Internal Revenue Code of 1986 shall be aggregated; or
(2) persons with 1 or more ownership relationships shall
also be aggregated if such relationships were designed with a
principal purpose of avoiding the application of these rules.
SEC. 3. LIMITATIONS.
(a) In General.--Nothing in this Act shall be construed as--
(1) subjecting a seller or any other person to franchise,
income, occupation, or any other type of taxes, other than
sales and use taxes;
(2) affecting the application of such taxes; or
(3) enlarging or reducing State authority to impose such
taxes.
(b) No Effect on Nexus.--This Act shall not be construed to create
any nexus between a person and a State or locality.
(c) Licensing and Regulatory Requirements.--Nothing in this Act
shall be construed as permitting or prohibiting a State from--
(1) licensing or regulating any person;
(2) requiring any person to qualify to transact intrastate
business;
(3) subjecting any person to State or local taxes not
related to the sale of goods or services; or
(4) exercising authority over matters of interstate
commerce.
(d) No New Taxes.--Nothing in this Act shall be construed as
encouraging a State to impose sales and use taxes on any goods or
services not subject to taxation prior to the date of the enactment of
this Act.
(e) No Effect on Intrastate Sales.--The provisions of this Act
shall apply only to remote sales and shall not apply to intrastate
sales or intrastate sourcing rules. States granted authority under
section 2(a) shall comply with all intrastate provisions of the
Streamlined Sales and Use Tax Agreement.
(f) No Effect on Mobile Telecommunications Sourcing Act.--Nothing
in this Act shall be construed as altering in any manner or preempting
the Mobile Telecommunications Sourcing Act (4 U.S.C. 116-126).
SEC. 4. DEFINITIONS AND SPECIAL RULES.
In this Act:
(1) Certified software provider.--The term ``certified
software provider'' means a person that--
(A) provides software to remote sellers to
facilitate State and local sales and use tax compliance
pursuant to section 2(b)(2)(D); and
(B) is certified by a State to so provide such
software.
(2) Locality; local.--The terms ``locality'' and ``local''
refer to any political subdivision of a State.
(3) Member state.--The term ``Member State''--
(A) 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
(B) does not include any associate member under the
Streamlined Sales and Use Tax Agreement.
(4) Person.--The term ``person'' means an individual,
trust, estate, fiduciary, partnership, corporation, limited
liability company, or other legal entity, and a State or local
government.
(5) Remote sale.--The term ``remote sale'' means a sale
into a State 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 Act.
(6) Remote seller.--The term ``remote seller'' means a
person that makes remote sales in the State.
(7) Sourced.--For purposes of a State granted authority
under section 2(b), the location to which a remote sale is
sourced refers to the location where the item 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 2(a) shall comply with the sourcing
provisions of the Streamlined Sales and Use Tax Agreement.
(8) 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, and any other
territory or possession of the United States.
(9) Streamlined sales and use tax agreement.--The term
``Streamlined Sales and Use Tax Agreement'' 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.
SEC. 5. 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.
SEC. 6. 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.
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