II 

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. 

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’’. 

6 SEC. 2. SENSE OF CONGRESS. 

7 It is the sense of Congress that States should have 

8 the ability to enforce their existing sales and use tax laws 

9 and to treat similar sales transactions equally, without reVerDate Mar 15 2010 01:54 Nov 10, 2011 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1832.IS S1832

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1 gard to the manner in which the sale is transacted, and 

2 the right to collect—or decide not to collect—taxes that 

3 are already owed under State law. 

4 SEC. 3. AUTHORIZATION TO REQUIRE COLLECTION OF 

5 SALES AND USE TAXES. 

6 (a) STREAMLINED SALES AND USE TAX AGREE7 MENT.—Each Member State under the Streamlined Sales 

8 and Use Tax Agreement is authorized to require all sellers 

9 not qualifying for a small seller exception to collect and 

10 remit sales and use taxes with respect to remote sales 

11 sourced to that Member State pursuant to the provisions 

12 of the Streamlined Sales and Use Tax Agreement. Such 

13 authority shall commence beginning no earlier than the 

14 first day of the calendar quarter that is at least 90 days 

15 after the date of the enactment of this Act. 

16 (b) ALTERNATIVE.— 

17 (1) IN GENERAL.—A State that is not a Mem18 ber State under the Streamlined Sales and Use Tax 

19 Agreement is authorized to require all sellers not 

20 qualifying for the small seller exception to collect 

21 and remit sales and use taxes with respect to remote 

22 sales sourced to that State, but only if the State 

23 adopts and implements minimum simplification re24 quirements. Such authority shall commence begin25 ning no earlier than the first day of the calendar 


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

2 the State enacts legislation to implement each of the 

3 following minimum simplification requirements: 

4 (A) Provide— 

5 (i) a single State-level agency to ad6 minister all sales and use tax laws, includ7 ing the collection and administration of all 

8 State and applicable locality sales and use 

9 taxes for all sales sourced to the State 

10 made by remote sellers, 

11 (ii) a single audit for all State and 

12 local taxing jurisdictions within that State, 

13 and 

14 (iii) a single sales and use tax return 

15 to be used by remote sellers and single and 

16 consolidated providers and to be filed with 

17 the State-level agency. 

18 (B) Provide a uniform sales and use tax 

19 base among the State and the local taxing juris20 dictions within the State. 

21 (C) Require remote sellers and single and 

22 consolidated providers to collect sales and use 

23 taxes pursuant to the applicable destination 

24 rate, which is the sum of the applicable State 


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1 rate and any applicable rate for the local juris2 diction into which the sale is made. 

3 (D) Provide— 

4 (i) adequate software and services to 

5 remote sellers and single and consolidated 

6 providers that identifies the applicable des7 tination rate, including the State and local 

8 sales tax rate (if any), to be applied on 

9 sales sourced to the State, and 

10 (ii) certification procedures for both 

11 single providers and consolidated providers 

12 to make software and services available to 

13 remote sellers, and hold such providers 

14 harmless for any errors or omissions as a 

15 result of relying on information provided 

16 by the State. 

17 (E) Hold remote sellers using a single or 

18 consolidated provider harmless for any errors 

19 and omissions by that provider. 

20 (F) Relieve remote sellers from liability to 

21 the State or locality for collection of the incor22 rect amount of sales or use tax, including any 

23 penalties or interest, if collection of the im24 proper amount is the result of relying on infor25 mation provided by the State. 


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1 (G) Provide remote sellers and single and 

2 consolidated providers with 30 days notice of a 

3 rate change by any locality in the State. 

4 (2) TREATMENT OF LOCAL RATE CHANGES.— 

5 For purposes of this subsection, local rate changes 

6 may only be effective on the first day of a calendar 

7 quarter. Failure to provide notice under paragraph 

8 (1)(G) shall require the State and locality to hold 

9 the remote seller or single or consolidated provider 

10 harmless for collecting tax at the immediately pre11 ceding effective rate during the 30-day period. Each 

12 State must provide updated rate information as part 

13 of the software and services required by paragraph 

14 (1)(D). 

15 (c) SMALL SELLER EXCEPTION.—A State shall be 

16 authorized to require a remote seller, or a single or con17 solidated provider acting on behalf of a remote seller, to 

18 collect sales or use tax under this Act if the remote seller 

19 has gross annual receipts in total remote sales in the 

20 United States in the preceding calendar year exceeding 

21 $500,000. For purposes of determining whether the 

22 threshold in this subsection is met, the sales of all persons 

23 related within the meaning of subsections (b) and (c) of 

24 section 267 or section 707(b)(1) of the Internal Revenue 

25 Code of 1986 shall be aggregated. 


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1 SEC. 4. TERMINATION OF AUTHORITY. 

2 The authority granted by this Act shall terminate on 

3 the date that the highest court of competent jurisdiction 

4 makes a final determination that the State no longer 

5 meets the requirements of this Act, and the determination 

6 of such court is no longer subject to appeal. 

7 SEC. 5. LIMITATIONS. 

8 (a) IN GENERAL.—Nothing in this Act shall be con9 strued as— 

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

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

12 taxes, other than sales and use taxes, 

13 (2) affecting the application of such taxes, or 

14 (3) enlarging or reducing State authority to im15 pose such taxes. 

16 (b) NO EFFECT ON NEXUS.—No obligation imposed 

17 by virtue of the authority granted by this Act shall be con18 sidered in determining whether a seller or any other per19 son has a nexus with any State for any tax purpose other 

20 than sales and use taxes. 

21 (c) LICENSING AND REGULATORY REQUIREMENTS.— 

22 Other than the limitation set forth in subsection (a), and 

23 section 3, nothing in this Act shall be construed as permit24 ting or prohibiting a State from— 

25 (1) licensing or regulating any person, 


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1 (2) requiring any person to qualify to transact 

2 intrastate business, 

3 (3) subjecting any person to State taxes not re4 lated to the sale of goods or services, or 

5 (4) exercising authority over matters of inter6 state commerce. 

7 (d) NO NEW TAXES.—Nothing in this Act shall be 

8 construed as encouraging a State to impose sales and use 

9 taxes on any goods or services not subject to taxation prior 

10 to the date of the enactment of this Act. 

11 (e) INTRASTATE SALES.—The provisions of this Act 

12 shall only apply to remote sales and shall not apply to 

13 intrastate sales or intrastate sourcing rules. States grant14 ed authority under section 3(a) shall comply with the 

15 intrastate provisions of the Streamlined Sales and Use 

16 Tax Agreement. 

17 SEC. 6. DEFINITIONS AND SPECIAL RULES. 

18 In this Act: 

19 (1) CONSOLIDATED PROVIDER.—The term 

20 ‘‘consolidated provider’’ means any person certified 

21 by a State who has the rights and responsibilities for 

22 sales and use tax administration, collection, remit23 tance, and audits for transactions serviced or proc24 essed for the sale of goods or services made by re25 mote sellers on an aggregated basis. 


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

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

3 State. 

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

5 State’’— 

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

7 used under the Streamlined Sales and Use Tax 

8 Agreement as in effect on the date of the enact9 ment of this Act, and 

10 (B) does not include any associate member 

11 under the Streamlined Sales and Use Tax 

12 Agreement. 

13 (4) PERSON.—The term ‘‘person’’ means an in14 dividual, trust, estate, fiduciary, partnership, cor15 poration, limited liability company, or other legal en16 tity, and a State or local government. 

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

18 means a sale of goods or services attributed to a 

19 State with respect to which a seller does not have 

20 adequate physical presence to establish nexus under 

21 Quill Corp. v. North Dakota, 504 U.S. 298 (1992). 

22 (6) REMOTE SELLER.—The term ‘‘remote sell23 er’’ means a person that makes remote sales. 

24 (7) SINGLE PROVIDER.—The term ‘‘single pro25 vider’’ means any person certified by a State who 


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1 has the rights and responsibilities for sales and use 

2 tax administration, collection, remittance, and audits 

3 for transactions serviced or processed for the sale of 

4 goods or services made by remote sellers. 

5 (8) SOURCED.—For purposes of a State grant6 ed authority under section 3(b), the location to 

7 which a remote sale is sourced refers to the location 

8 where the item sold is received by the purchaser, 

9 based on the location indicated by instructions for 

10 delivery that the purchaser furnishes to the seller. 

11 When no delivery location is specified, the remote 

12 sale is sourced to the customer’s address that is ei13 ther known to the seller or, if not known, obtained 

14 by the seller during the consummation of the trans15 action, including the address of the customer’s pay16 ment instrument if no other address is available. If 

17 an address is unknown and a billing address cannot 

18 be obtained, the remote sale is sourced to the ad19 dress of the seller from which the remote sale was 

20 made. A State granted authority under section 3(a) 

21 shall comply with the sourcing provisions of the 

22 Streamlined Sales and Use Tax Agreement. 

23 (9) STATE.—The term ‘‘State’’ means each of 

24 the several States, the District of Columbia, the 

25 Commonwealth of Puerto Rico, Guam, American 


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1 Samoa, the United States Virgin Islands, the Com2 monwealth of the Northern Mariana Islands, and 

3 any other territory or possession of the United 

4 States. 

5 (10) STREAMLINED SALES AND USE TAX

6 AGREEMENT.—The term ‘‘Streamlined Sales and 

7 Use Tax Agreement’’ means the multi-State agree8 ment with that title adopted on November 12, 2002, 

9 as in effect on the date of the enactment of this Act 

10 and as further amended from time to time. 

11 SEC. 7. SEVERABILITY. 

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

13 provision to any person or circumstance is held to be un14 constitutional, the remainder of this Act and the applica15 tion of the provisions of such to any person or cir16 cumstance shall not be affected thereby. 

Æ 


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