National Retail Sales Tax Act of 1996

Summary: National Retail Sales Tax Act of 1996 - Repeals the income, estate, gift, and certain excise tax provisions of the Internal Revenue Code. 
(Sec. 4) Amends the Internal Revenue Code by imposing a 15 percent tax on the use, consumption or enjoyment in the U.S. of any property or service produced or rendered within or out of the U.S.  Prohibits imposing tax on any property or service:  (1) purchased for resale; (2) purchased to produce property or services; or (3) exported from the U.S. for use, consumption or enjoyment outside of the U.S.  Sets forth special rules relating to the obligation of governmental units and not-for-profit organizations to collect and remit tax.  Sets forth provisions concerning credits and refunds. 
Allows an eligible family unit to receive a sales tax rebate (family consumption refund).  Requires that a family member, to be counted for the purposes of determining family unit size, must:  (1) if over two years old, have a bona fide Social Security number; and (2) be a U.S. resident.  Conditions that no individual shall be considered part of more than one family unit. 
Sets forth special rules.  Impose
s a 15
 percent tax on gaming services.  Imposes an excise tax of 15 percent on the wages of Federal, State, and local government employees.    Authorizes States to administer, collect, and remit tax. 
Authorizes the Secretary to establish a system including the use of a toll-free telephone number for the purposes of bringing violations to the attention of the Secretary for investigation. 
Authorizes the Secretary to establish an Office of Revenue Allocation to arbitrate any claims or disputes among States. 
(Sec. 5) Prohibits the authorization of appropriations for the Internal Revenue Service after FY 2000. 
(Sec. 6) Authorizes the Secretary to establish an Excise Tax Bureau to collect excise taxes not repealed by this Act. 
(Sec. 7) Authorizes the Social Security Administration to collect and administer self-employment income and employment payroll taxes beginning in 1998. 
(Sec. 9) Increases the interest rate on the underpayment of tax by large corporations. 
(Sec. 10) Requires a supermajority in the House of Representatives or the Senate to raise rates.

OFFICERS.

    ``The State Administrator shall establish a Problem Resolution 
Office. Problem Resolution Officers shall have the authority to 
investigate taxpayer complaints and enjoin collection activity if, in 
the opinion of the Problem Resolution Officer, said collection activity 
is reasonably likely to not be in compliance with law. Said 
administrative injunction may only be reversed by the highest official 
in the relevant State or Federal taxing authority or by its General 
Counsel upon a finding that the collection activity is justified by 
clear and convincing evidence. The authority to reverse this 
administrative injunction may not be delegated. Problem Resolution 
Officers shall not be disciplined or adversely affected for the 
issuance of administrative injunctions unless a pattern or issuing 
injunctions that are manifestly unreasonable is proven in an 
administrative hearing. Nothing in this section shall limit the 
authority of the State Administrators or the taxpayer to pursue any 
legal remedy in any court with jurisdiction over the dispute at issue.

``SEC. 53. JURISDICTION AND INTERSTATE ALLOCATION.

    ``(a) Allocation Rules.--For purposes of allocating revenue between 
or among administering states from taxes imposed by this subtitle, the 
revenue shall be allocated to those states that are the destination of 
the taxable property or services. The destination of the purchase of 
taxable property and services shall be determined in accordance with 
this section.
    ``(b) Federal Office of Revenue Allocation.--The Secretary shall 
establish an Office of Revenue Allocation to arbitrate any claims or 
disputes among administering states as to the destination of taxable 
property and services for purposes of allocating revenue between or 
among the states from taxes imposed by this subtitle. The determination 
of the Administrator of the Office of Revenue Allocation shall be 
subject to judicial review in any federal court with competent 
jurisdiction provided, however, that the standard of review shall be 
abuse of discretion.
    ``(c) Tangible Personal Property.--The destination of tangible 
personal property shall be the state or territory in which the property 
was first delivered to the purchaser. Tangible personal property 
shipped by means of the mail or common carrier shall be deemed 
delivered to the location of the purchaser for purposes of this 
subsection upon shipment by mail or common carrier.
    ``(d) Real Property.--The destination of real property or rents or 
leaseholds on real property shall be state or territory in which the 
real property is located.
    ``(e) Other Property.--The destination of other property shall be 
residence of the purchaser.
    ``(f) Services.--
            ``(1) General rule.--The destination of services shall be 
        state or territory in which the use, consumption or enjoyment 
        of the services occurred. Allocation of service invoices 
        relating to more than one jurisdiction shall be on the basis of 
        time.
            ``(2) Telecommunications services.--The destination of 
        telecommunications services shall be the residence of the 
        purchaser. Telecommunications services shall include telephone, 
        telegraph, cable television, satellite and computer on-line or 
        network services.
            ``(3) Domestic transportation services.--For transportation 
        services where all of the final destinations are within the 
        United States, the destination of transportation services shall 
        be the final destination of the trip (in the case of round or 
        multiple trip fares, the services amount shall be equally 
        allocated among the final destinations).
            ``(4) International transportation services.--For 
        transportation services where the final destination or origin 
        of the trip is without the United States, the service amount 
        shall be deemed 50 percent attributable to the United States 
        destination and origin.
    ``(g) Financial Intermediation Services.--The destination of 
financial intermediation services shall be the residence of the 
purchase.
    ``(h) A State Tax Administrator shall have jurisdiction over any 
gross payments made which have a destination (as determined in 
accordance with this section) within the state of said State Tax 
Administrator. This grant of jurisdiction is not exclusive of other 
jurisdiction that said State Tax Administrator may have.
    ``(i) Rents and Royalties Paid for the Lease of Tangible 
Property.--
            ``(1) General rule.--The destination of rents and royalties 
        paid for the lease of tangible property shall be where the 
        property is located.
            ``(2) Vehicles.--The destination of rent and lease payments 
        on vehicles shall be--
                    ``(A) in the case of rentals and leases of a term 
                one month or less, the location where the vehicle was 
                originally delivered to the lessee; and
                    ``(B) in the case of rentals and leases of a term 
                greater than one month, the residence of the lessee.
    ``(j) Royalties for the License of Intangible Property.--The 
destination of royalties for the license of intangible is where the 
property is used.

``SEC. 54. TAX TO BE STATED AND CHARGED SEPARATELY.

    ``(a) In General.--For each purchase of taxable property or 
services for which a tax is imposed pursuant to section 1, the sales 
tax shall be charged separately from the purchase price by the vendor 
or seller. For purchase of taxable property or services for which a tax 
is imposed pursuant to section 1, the vendor shall provide to the 
purchaser a receipt that sets forth at least the following 
information--
            ``(1) the property or services price exclusive of tax;
            ``(2) the amount of tax paid;
            ``(3) the property or service price inclusive of tax;
            ``(4) the tax rate (the amount of tax paid (per 
        subparagraph 2) divided by the property or service price 
        inclusive of tax (per subparagraph 3));
            ``(5) the date that the good or service was sold;
            ``(6) the name of the vendor; and
            ``(7) the vendor registration number.
    ``(b) Vending Machine Exception.--The requirements of subsection 
(a) shall be inapplicable in the case of sales by vending machines. 
Vending machines for purposes of this subsection shall mean machines--
            ``(1) that dispense taxable property in exchange for coins, 
        one, five, ten or twenty dollar bills, and
            ``(2) that sell no single item exceeding ten dollars per 
        unit in price.''

SEC. 5. PHASE-OUT OF THE INTERNAL REVENUE SERVICE.

    Appropriations for any expenses of the Internal Revenue Service 
including processing income tax returns for years prior to the repeal 
of the income tax, revenue accounting, management, transfer of payroll 
tax data to the Social Security Administration and otherwise for years 
after fiscal year 2000 are not authorized.

SEC. 6. EXCISE TAX ADMINISTRATION.

    The Secretary shall establish an Excise Tax Bureau to collect 
excise taxes formerly collected and administered by the Internal 
Revenue Service that are not repealed by this Act.

SEC. 7. SOCIAL SECURITY ADMINISTRATION TO COLLECT PAYROLL TAXES.

    (a) Commencing January 1, 1998, the Social Security Administration 
shall collect and administer the taxes imposed pursuant to chapter 2 of 
subtitle A (relating to self employment income taxes) and subtitle C 
(relating to employment taxes) of the Internal Revenue Code of 1986.
    (b) Cross References.--

                                For revised rules relating to the self-
employment tax, see section 57.
                                For rules relating to revised 
withholding tax schedules and family consumption refund, see section 
15.
                                For rules relating to trust fund 
accounting and payroll tax revenues, see section 6(b) of this act.

SEC. 8. SELF-EMPLOYMENT TAX.

    (a) Subsection 1402(a) of the Internal Revenue Code of 1986 is 
amended to read as follows:
    ``(a) In General.--`Self employment income' shall mean gross 
payments received in a calendar year from the sale of taxable property 
or services (without regard to exemption) less the sum in a calendar 
year of--
            ``(1) purchases of taxable property or services (without 
        regard to exemption) in furtherance of a business purpose,
            ``(2) any wages paid (whether to the self-employed person 
        or others) in furtherance of a business purpose,
            ``(3) unused transition amounts, and
            ``(4) undeducted negative self employment income amounts 
        from prior periods.
    ``(b) Transition Amounts.--
            ``(1) General rule.--The transition amount for the ten 
        calendar years commencing in 1998 shall be the unrecovered 
        basis amount as of the end of December 31, 1997 divided by ten.
            ``(2) Unrecovered basis amount.--The unrecovered basis 
        amount shall be remaining income tax basis relating to--
                    ``(A) prior law section 167 property placed in 
                service prior to January 1, 1998, and
                    ``(B) inventory held as of the end of 1997 
                (including any amounts capitalized in accordance with 
                prior law section 263A).''
    (b) Conforming Amendments.--Subsection 1402(b) and 1402(c) are 
hereby repealed. Subsections 1402(d) et seq. are hereby renumbered as 
subsections 1402(b) et seq.

SEC. 9. INTEREST.

    Section 6621 of the Internal Revenue Code of 1986 is amended by 
striking the last sentence in section 6621(a)(1) and by striking ``3'' 
in section 6621(a)(2)(B) and substituting in its stead ``2''.

SEC. 10. SUPERMAJORITY REQUIRED TO RAISE RATE.

    ``(a) In General.--It shall not be in order in the House of 
Representatives or the Senate to consider any bill, joint resolution, 
amendment thereto, or conference report thereon that includes any 
provision that--
            (1) increases any federal sales tax rate,
            (2) provides any exemption, deduction, credit or other 
        benefit which results in a reduction in federal revenues.
    (b) Waiver or Suspension.--This section may be waived or suspended 
in the House of Representatives or the Senate only by the affirmative 
vote of two-thirds of the Members, duly chosen and sworn.
                                 
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