II 

115TH CONGRESS 

1ST SESSION S. 976 

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 

APRIL 27, 2017 

Mr. ENZI (for himself, Mr. DURBIN, Mr. ALEXANDER, Ms. HEITKAMP, Ms. 

WARREN, Mr. REED, Mr. WHITEHOUSE, Mr. WARNER, Mr. CARDIN, Mr. 

KAINE, Mr. MARKEY, Mr. BLUNT, Mr. ROUNDS, Ms. DUCKWORTH, and 

Ms. COLLINS) 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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Marketplace Fairness 

5 Act of 2017’’. 

6 SEC. 2. AUTHORIZATION TO REQUIRE COLLECTION OF 

7 SALES AND USE TAXES. 

8 (a) STREAMLINED SALES AND USE TAX AGREE9 MENT.—Each Member State under the Streamlined Sales 


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1 and Use Tax Agreement is authorized to require all sellers 

2 not qualifying for the small seller exception described in 

3 subsection (c) to collect and remit sales and use taxes with 

4 respect to remote sales sourced to that Member State pur5 suant to the provisions of the Streamlined Sales and Use 

6 Tax Agreement, but only if any changes to the Stream7 lined Sales and Use Tax Agreement made after the date 

8 of the enactment of this Act are not in conflict with the 

9 minimum simplification requirements in subsection (b)(2). 

10 Subject to section 3(h), a State may exercise authority 

11 under this Act beginning 180 days after the State pub12 lishes notice of the State’s intent to exercise the authority 

13 under this Act, but no earlier than the first day of the 

14 calendar quarter that is at least 180 days after the date 

15 of the enactment of this Act. 

16 (b) ALTERNATIVE.—A State that is not a Member 

17 State under the Streamlined Sales and Use Tax Agree18 ment is authorized notwithstanding any other provision of 

19 law to require all sellers not qualifying for the small seller 

20 exception described in subsection (c) to collect and remit 

21 sales and use taxes with respect to remote sales sourced 

22 to that State, but only if the State adopts and implements 

23 the minimum simplification requirements in paragraph 

24 (2). Subject to section 3(h), such authority shall com25 mence beginning no earlier than the first day of the calVerDate Sep 11 2014 04:25 Apr 29, 2017 Jkt 069200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S976.IS S976

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1 endar quarter that is at least 6 months after the date that 

2 the State— 

3 (1) enacts legislation to exercise the authority 

4 granted by this Act— 

5 (A) specifying the tax or taxes to which 

6 such authority and the minimum simplification 

7 requirements in paragraph (2) shall apply; and 

8 (B) specifying the products and services 

9 otherwise subject to the tax or taxes identified 

10 by the State under subparagraph (A) to which 

11 the authority of this Act shall not apply; and 

12 (2) implements each of the following minimum 

13 simplification requirements: 

14 (A) Provide— 

15 (i) a single entity within the State re16 sponsible for all State and local sales and 

17 use tax administration, return processing, 

18 and audits for remote sales sourced to the 

19 State; 

20 (ii) a single audit of a remote seller 

21 for all State and local taxing jurisdictions 

22 within that State; and 

23 (iii) a single sales and use tax return 

24 to be used by remote sellers to be filed 


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1 with the single entity responsible for tax 

2 administration. 

3 A State may not require a remote seller to file 

4 sales and use tax returns any more frequently 

5 than returns are required for nonremote sellers 

6 or impose requirements on remote sellers that 

7 the State does not impose on nonremote sellers 

8 with respect to the collection of sales and use 

9 taxes under this Act. No local jurisdiction may 

10 require a remote seller to submit a sales and 

11 use tax return or to collect sales and use taxes 

12 other than as provided by this paragraph. 

13 (B) Provide a uniform sales and use tax 

14 base among the State and the local taxing juris15 dictions within the State pursuant to paragraph 

16 (1). 

17 (C) Source all remote sales in compliance 

18 with the sourcing definition set forth in section 

19 4(7). 

20 (D) Provide— 

21 (i) information indicating the tax22 ability of products and services along with 

23 any product and service exemptions from 

24 sales and use tax in the State and a rates 

25 and boundary database; 


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1 (ii) software free of charge for remote 

2 sellers that calculates sales and use taxes 

3 due on each transaction at the time the 

4 transaction is completed, that files sales 

5 and use tax returns, and that is updated to 

6 reflect rate changes as described in sub7 paragraph (H); and 

8 (iii) certification procedures for per9 sons to be approved as certified software 

10 providers. 

11 For purposes of clause (iii), the software pro12 vided by certified software providers shall be ca13 pable of calculating and filing sales and use 

14 taxes in all States qualified under this Act. 

15 (E) Relieve remote sellers from liability to 

16 the State or locality for the incorrect collection, 

17 remittance, or noncollection of sales and use 

18 taxes, including any penalties or interest, if the 

19 liability is the result of an error or omission 

20 made by a certified software provider. 

21 (F) Relieve certified software providers 

22 from liability to the State or locality for the in23 correct collection, remittance, or noncollection 

24 of sales and use taxes, including any penalties 

25 or interest, if the liability is the result of misVerDate Sep 11 2014 04:25 Apr 29, 2017 Jkt 069200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S976.IS S976

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1 leading or inaccurate information provided by a 

2 remote seller. 

3 (G) Relieve remote sellers and certified 

4 software providers from liability to the State or 

5 locality for incorrect collection, remittance, or 

6 noncollection of sales and use taxes, including 

7 any penalties or interest, if the liability is the 

8 result of incorrect information or software pro9 vided by the State. 

10 (H) Provide remote sellers and certified 

11 software providers with 90 days notice of a rate 

12 change by the State or any locality in the State 

13 and update the information described in sub14 paragraph (D)(i) accordingly and relieve any re15 mote seller or certified software provider from 

16 liability for collecting sales and use taxes at the 

17 immediately preceding effective rate during the 

18 90-day notice period if the required notice is 

19 not provided. 

20 (c) SMALL SELLER EXCEPTION.—A State is author21 ized to require a remote seller to collect sales and use taxes 

22 under this Act only if the remote seller has gross annual 

23 receipts in total remote sales in the United States in the 

24 preceding calendar year exceeding $1,000,000. For pur25 poses of determining whether the threshold in this section 


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1 is met, the gross annual receipts from remote sales of two 

2 or more persons shall be aggregated if— 

3 (1) such persons are related to the remote seller 

4 within the meaning of subsections (b) and (c) of sec5 tion 267 or section 707(b)(1) of the Internal Rev6 enue Code of 1986; or 

7 (2) such persons have one or more ownership 

8 relationships and such relationships were designed 

9 with a principal purpose of avoiding the application 

10 of these rules. 

11 SEC. 3. LIMITATIONS. 

12 (a) IN GENERAL.—Nothing in this Act shall be con13 strued as— 

14 (1) subjecting a seller or any other person to 

15 franchise, income, occupation, or any other type of 

16 taxes, other than sales and use taxes; 

17 (2) affecting the application of such taxes; or 

18 (3) enlarging or reducing State authority to im19 pose such taxes. 

20 (b) NO EFFECT ON NEXUS.—This Act shall not be 

21 construed to create any nexus or alter the standards for 

22 determining nexus between a person and a State or local23 ity. 

24 (c) NO EFFECT ON SELLER CHOICE.—Nothing in 

25 this Act shall be construed to deny the ability of a remote 


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1 seller to deploy and utilize a certified software provider 

2 of the seller’s choice. 

3 (d) LICENSING AND REGULATORY REQUIRE4 MENTS.—Nothing in this Act shall be construed as permit5 ting or prohibiting a State from— 

6 (1) licensing or regulating any person; 

7 (2) requiring any person to qualify to transact 

8 intrastate business; 

9 (3) subjecting any person to State or local taxes 

10 not related to the sale of products or services; or 

11 (4) exercising authority over matters of inter12 state commerce. 

13 (e) NO NEW TAXES.—Nothing in this Act shall be 

14 construed as encouraging a State to impose sales and use 

15 taxes on any products or services not subject to taxation 

16 prior to the date of the enactment of this Act. 

17 (f) NO EFFECT ON INTRASTATE SALES.—The provi18 sions of this Act shall apply only to remote sales and shall 

19 not apply to intrastate sales or intrastate sourcing rules. 

20 States granted authority under section 2(a) shall comply 

21 with all intrastate provisions of the Streamlined Sales and 

22 Use Tax Agreement. 

23 (g) NO EFFECT ON MOBILE TELECOMMUNICATIONS

24 SOURCING ACT.—Nothing in this Act shall be construed 


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1 as altering in any manner or preempting the Mobile Tele2 communications Sourcing Act (4 U.S.C. 116–126). 

3 (h) LIMITATION ON INITIAL COLLECTION OF SALES

4 AND USE TAXES FROM REMOTE SALES.—A State may 

5 not begin to exercise the authority under this Act— 

6 (1) before the date that is 1 year after the date 

7 of the enactment of this Act; and 

8 (2) during the period beginning October 1 and 

9 ending on December 31 of the first calendar year 

10 beginning after the date of the enactment of this 

11 Act. 

12 SEC. 4. DEFINITIONS AND SPECIAL RULES. 

13 In this Act: 

14 (1) CERTIFIED SOFTWARE PROVIDER.—The 

15 term ‘‘certified software provider’’ means a person 

16 that— 

17 (A) provides software to remote sellers to 

18 facilitate State and local sales and use tax com19 pliance pursuant to section 2(b)(2)(D)(ii); and 

20 (B) is certified by a State to so provide 

21 such software. 

22 (2) LOCALITY; LOCAL.—The terms ‘‘locality’’ 

23 and ‘‘local’’ refer to any political subdivision of a 

24 State. 


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1 (3) MEMBER STATE.—The term ‘‘Member 

2 State’’— 

3 (A) means a Member State as that term is 

4 used under the Streamlined Sales and Use Tax 

5 Agreement as in effect on the date of the enact6 ment of this Act; and 

7 (B) does not include any associate member 

8 under the Streamlined Sales and Use Tax 

9 Agreement. 

10 (4) PERSON.—The term ‘‘person’’ means an in11 dividual, trust, estate, fiduciary, partnership, cor12 poration, limited liability company, or other legal en13 tity, and a State or local government. 

14 (5) REMOTE SALE.—The term ‘‘remote sale’’ 

15 means a sale into a State, as determined under the 

16 sourcing rules under paragraph (7), in which the 

17 seller would not legally be required to pay, collect, 

18 or remit State or local sales and use taxes unless 

19 provided by this Act. 

20 (6) REMOTE SELLER.—The term ‘‘remote sell21 er’’ means a person that makes remote sales in the 

22 State. 

23 (7) SOURCED.—For purposes of a State grant24 ed authority under section 2(b), the location to 

25 which a remote sale is sourced refers to the location 


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1 where the product or service sold is received by the 

2 purchaser, based on the location indicated by in3 structions for delivery that the purchaser furnishes 

4 to the seller. When no delivery location is specified, 

5 the remote sale is sourced to the customer’s address 

6 that is either known to the seller or, if not known, 

7 obtained by the seller during the consummation of 

8 the transaction, including the address of the cus9 tomer’s payment instrument if no other address is 

10 available. If an address is unknown and a billing ad11 dress cannot be obtained, the remote sale is sourced 

12 to the address of the seller from which the remote 

13 sale was made. A State granted authority under sec14 tion 2(a) shall comply with the sourcing provisions 

15 of the Streamlined Sales and Use Tax Agreement. 

16 (8) STATE.—The term ‘‘State’’ means each of 

17 the several States, the District of Columbia, the 

18 Commonwealth of Puerto Rico, Guam, American 

19 Samoa, the United States Virgin Islands, the Com20 monwealth of the Northern Mariana Islands, and 

21 any other territory or possession of the United 

22 States, and any tribal organization (as defined in 

23 section 4 of the Indian Self-Determination and Edu24 cation Assistance Act (25 U.S.C. 450b)). 


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1 (9) STREAMLINED SALES AND USE TAX AGREE2 MENT.—The term ‘‘Streamlined Sales and Use Tax 

3 Agreement’’ means the multi-State agreement with 

4 that title adopted on November 12, 2002, as in ef5 fect on the date of the enactment of this Act and as 

6 further amended from time to time. 

7 SEC. 5. SEVERABILITY. 

8 If any provision of this Act or the application of such 

9 provision to any person or circumstance is held to be un10 constitutional, the remainder of this Act and the applica11 tion of the provisions of such to any person or cir12 cumstance shall not be affected thereby. 

13 SEC. 6. PREEMPTION. 

14 Except as otherwise provided in this Act, this Act 

15 shall not be construed to preempt or limit any power exer16 cised or to be exercised by a State or local jurisdiction 

17 under the law of such State or local jurisdiction or under 

18 any other Federal law. 

Æ 


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