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[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 1832 Introduced in Senate (IS)]

112th CONGRESS
  1st Session
                                S. 1832

 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

                            November 9, 2011

Mr. Enzi (for himself, Mr. Durbin, Mr. Alexander, Mr. Johnson of South 
 Dakota, Mr. Boozman, Mr. Reed, Mr. Blunt, Mr. Whitehouse, Mr. Corker, 
and Mr. Pryor) 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''.

SEC. 2. SENSE OF CONGRESS.

    It is the sense of Congress that States should have the ability to 
enforce their existing sales and use tax laws and to treat similar 
sales transactions equally, without regard to the manner in which the 
sale is transacted,   and the right to collect--or decide not to 
collect--taxes that are already owed under State law.

SEC. 3. 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 a small seller exception 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. Such authority shall commence 
beginning 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.--
            (1) In general.--A State that is not a Member State under 
        the Streamlined Sales and Use Tax Agreement 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 sourced to that State, but only if the State 
        adopts and implements minimum simplification requirements. 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 enacts legislation to implement each of the 
        following minimum simplification requirements:
                    (A) Provide--
                            (i) a single State-level agency to 
                        administer all sales and use tax laws, 
                        including the collection and administration of 
                        all State and applicable locality sales and use 
                        taxes for all sales sourced to the State made 
                        by remote sellers,
                            (ii) a single audit 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 and single and 
                        consolidated providers and to be filed with the 
                        State-level agency.
                    (B) Provide a uniform sales and use tax base among 
                the State and the local taxing jurisdictions within the 
                State.
                    (C) Require remote sellers and single and 
                consolidated providers to collect sales and use taxes 
                pursuant to the applicable destination rate, which is 
                the sum of the applicable State rate and any applicable 
                rate for the local jurisdiction into which the sale is 
                made.
                    (D) Provide--
                            (i) adequate software and services to 
                        remote sellers and single and consolidated 
                        providers that identifies the applicable 
                        destination rate, including the State and local 
                        sales tax rate (if any), to be applied on sales 
                        sourced to the State, and
                            (ii) certification procedures for both 
                        single providers and consolidated providers to 
                        make software and services available to remote 
                        sellers, and hold such providers harmless for 
                        any errors or omissions as a result of relying 
                        on information provided by the State.
                    (E) Hold remote sellers using a single or 
                consolidated provider harmless for any errors and 
                omissions by that provider.
                    (F) Relieve remote sellers from liability to the 
                State or locality for collection of the incorrect 
                amount of sales or use tax, including any penalties or 
                interest, if collection of the improper amount is the 
                result of relying on information provided by the State.
                    (G) Provide remote sellers and single and 
                consolidated providers with 30 days notice of a rate 
                change by any locality in the State.
            (2) Treatment of local rate changes.--For purposes of this 
        subsection, local rate changes may only be effective on the 
        first day of a calendar quarter. Failure to provide notice 
        under paragraph (1)(G) shall require the State and locality to 
        hold the remote seller or single or consolidated provider 
        harmless for collecting tax at the immediately preceding 
        effective rate during the 30-day period. Each State must 
        provide updated rate information as part of the software and 
        services required by paragraph (1)(D).
    (c) Small Seller Exception.--A State shall be authorized to require 
a remote seller, or a single or consolidated provider acting on behalf 
of a remote seller, to collect sales or use tax under this Act if the 
remote seller has gross annual receipts in total remote sales in the 
United States in the preceding calendar year exceeding $500,000.   For 
purposes of determining whether the threshold in this subsection is 
met, 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.

SEC. 4. TERMINATION OF AUTHORITY.

    The authority granted by this Act shall terminate on the date that 
the highest court of competent jurisdiction makes a final determination 
that the State no longer meets the requirements of this Act, and the 
determination of such court is no longer subject to appeal.

SEC. 5. 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.--No obligation imposed by virtue of the 
authority granted by this Act shall be considered in determining 
whether a seller or any other person has a nexus with any State for any 
tax purpose other than sales and use taxes.
    (c) Licensing and Regulatory Requirements.--Other than the 
limitation set forth in subsection (a), and section 3, 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 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) Intrastate Sales.--The provisions of this Act shall only apply 
to remote sales and shall not apply to intrastate sales or intrastate 
sourcing rules. States granted authority under section 3(a) shall 
comply with the intrastate provisions of the Streamlined Sales and Use 
Tax Agreement.

SEC. 6. DEFINITIONS AND SPECIAL RULES.

    In this Act:
            (1) Consolidated provider.--The term ``consolidated 
        provider'' means any person certified by a State who has the 
        rights and responsibilities for sales and use tax 
        administration, collection, remittance, and audits for 
        transactions serviced or processed for the sale of goods or 
        services made by remote sellers on an aggregated basis.
            (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 of 
        goods or services attributed to a State with respect to which a 
        seller does not have adequate physical presence to establish 
        nexus under Quill Corp. v. North Dakota, 504 U.S. 298 (1992).
            (6) Remote seller.--The term ``remote seller'' means a 
        person that makes remote sales.
            (7) Single provider.--The term ``single provider'' means 
        any person certified by a State who has the rights and 
        responsibilities for sales and use tax administration, 
        collection, remittance, and audits for transactions serviced or 
        processed for the sale of goods or services made by remote 
        sellers.
            (8) Sourced.--For purposes of a State granted authority 
        under section 3(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 3(a) shall comply with the sourcing 
        provisions of the Streamlined Sales and Use Tax Agreement.
            (9) 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.
            (10) 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. 7. 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>
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