113TH CONGRESS 

1ST SESSION S. 743 

AN ACT 

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, 
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1 SECTION 1. SHORT TITLE. 

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

3 Act of 2013’’. 

4 SEC. 2. 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 the small seller exception described in 

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

11 respect to remote sales sourced to that Member State pur12 suant to the provisions of the Streamlined Sales and Use 

13 Tax Agreement, but only if any changes to the Stream14 lined Sales and Use Tax Agreement made after the date 

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

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

17 A State may exercise authority under this Act beginning 

18 180 days after the State publishes notice of the State’s 

19 intent to exercise the authority under this Act, but no ear20 lier than the first day of the calendar quarter that is at 

21 least 180 days after the date of the enactment of this Act. 

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

23 State under the Streamlined Sales and Use Tax Agree24 ment is authorized notwithstanding any other provision of 

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

26 exception described in subsection (c) to collect and remit 
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1 sales and use taxes with respect to remote sales sourced 

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

3 the minimum simplification requirements in paragraph 

4 (2). Such authority shall commence beginning no earlier 

5 than the first day of the calendar quarter that is at least 

6 6 months after the date that the State— 

7 (1) enacts legislation to exercise the authority 

8 granted by this Act— 

9 (A) specifying the tax or taxes to which 

10 such authority and the minimum simplification 

11 requirements in paragraph (2) shall apply; and 

12 (B) specifying the products and services 

13 otherwise subject to the tax or taxes identified 

14 by the State under subparagraph (A) to which 

15 the authority of this Act shall not apply; and 

16 (2) implements each of the following minimum 

17 simplification requirements: 

18 (A) Provide— 

19 (i) a single entity within the State re20 sponsible for all State and local sales and 

21 use tax administration, return processing, 

22 and audits for remote sales sourced to the 

23 State; 
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1 (ii) a single audit of a remote seller 

2 for all State and local taxing jurisdictions 

3 within that State; and 

4 (iii) a single sales and use tax return 

5 to be used by remote sellers to be filed 

6 with the single entity responsible for tax 

7 administration. 

8 A State may not require a remote seller to file 

9 sales and use tax returns any more frequently 

10 than returns are required for nonremote sellers 

11 or impose requirements on remote sellers that 

12 the State does not impose on nonremote sellers 

13 with respect to the collection of sales and use 

14 taxes under this Act. No local jurisdiction may 

15 require a remote seller to submit a sales and 

16 use tax return or to collect sales and use taxes 

17 other than as provided by this paragraph. 

18 (B) Provide a uniform sales and use tax 

19 base among the State and the local taxing juris20 dictions within the State pursuant to paragraph 

21 (1). 

22 (C) Source all remote sales in compliance 

23 with the sourcing definition set forth in section 

24 4(7). 

25 (D) Provide— 
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1 (i) information indicating the tax2 ability of products and services along with 

3 any product and service exemptions from 

4 sales and use tax in the State and a rates 

5 and boundary database; 

6 (ii) software free of charge for remote 

7 sellers that calculates sales and use taxes 

8 due on each transaction at the time the 

9 transaction is completed, that files sales 

10 and use tax returns, and that is updated to 

11 reflect rate changes as described in sub12 paragraph (H); and 

13 (iii) certification procedures for per14 sons to be approved as certified software 

15 providers. 

16 For purposes of clause (iii), the software pro17 vided by certified software providers shall be ca18 pable of calculating and filing sales and use 

19 taxes in all States qualified under this Act. 

20 (E) Relieve remote sellers from liability to 

21 the State or locality for the incorrect collection, 

22 remittance, or noncollection of sales and use 

23 taxes, including any penalties or interest, if the 

24 liability is the result of an error or omission 

25 made by a certified software provider. 
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1 (F) Relieve certified software providers 

2 from liability to the State or locality for the in3 correct collection, remittance, or noncollection 

4 of sales and use taxes, including any penalties 

5 or interest, if the liability is the result of mis6 leading or inaccurate information provided by a 

7 remote seller. 

8 (G) Relieve remote sellers and certified 

9 software providers from liability to the State or 

10 locality for incorrect collection, remittance, or 

11 noncollection of sales and use taxes, including 

12 any penalties or interest, if the liability is the 

13 result of incorrect information or software pro14 vided by the State. 

15 (H) Provide remote sellers and certified 

16 software providers with 90 days notice of a rate 

17 change by the State or any locality in the State 

18 and update the information described in sub19 paragraph (D)(i) accordingly and relieve any re20 mote seller or certified software provider from 

21 liability for collecting sales and use taxes at the 

22 immediately preceding effective rate during the 

23 90-day notice period if the required notice is 

24 not provided. 
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1 (c) SMALL SELLER EXCEPTION.—A State is author2 ized to require a remote seller to collect sales and use taxes 

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

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

5 preceding calendar year exceeding $1,000,000. For pur6 poses of determining whether the threshold in this section 

7 is met, the gross annual receipts from remote sales of 2 

8 or more persons shall be aggregated if— 

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

10 within the meaning of subsections (b) and (c) of sec11 tion 267 or section 707(b)(1) of the Internal Rev12 enue Code of 1986; or 

13 (2) such persons have 1 or more ownership re14 lationships and such relationships were designed 

15 with a principal purpose of avoiding the application 

16 of these rules. 

17 SEC. 3. LIMITATIONS. 

18 (a) IN GENERAL.—Nothing in this Act shall be con19 strued as— 

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

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

22 taxes, other than sales and use taxes; 

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

24 (3) enlarging or reducing State authority to im25 pose such taxes. 
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1 (b) NO EFFECT ON NEXUS.—This Act shall not be 

2 construed to create any nexus or alter the standards for 

3 determining nexus between a person and a State or local4 ity. 

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

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

7 seller to deploy and utilize a certified software provider 

8 of the seller’s choice. 

9 (d) LICENSING AND REGULATORY REQUIRE10 MENTS.—Nothing in this Act shall be construed as permit11 ting or prohibiting a State from— 

12 (1) licensing or regulating any person; 

13 (2) requiring any person to qualify to transact 

14 intrastate business; 

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

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

17 (4) exercising authority over matters of inter18 state commerce. 

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

20 construed as encouraging a State to impose sales and use 

21 taxes on any products or services not subject to taxation 

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

23 (f) NO EFFECT ON INTRASTATE SALES.—The provi24 sions of this Act shall apply only to remote sales and shall 

25 not apply to intrastate sales or intrastate sourcing rules. 
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1 States granted authority under section 2(a) shall comply 

2 with all intrastate provisions of the Streamlined Sales and 

3 Use Tax Agreement. 

4 (g) NO EFFECT ON MOBILE TELECOMMUNICATIONS

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

6 as altering in any manner or preempting the Mobile Tele7 communications Sourcing Act (4 U.S.C. 116–126). 

8 SEC. 4. DEFINITIONS AND SPECIAL RULES. 

9 In this Act: 

10 (1) CERTIFIED SOFTWARE PROVIDER.—The 

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

12 that— 

13 (A) provides software to remote sellers to 

14 facilitate State and local sales and use tax com15 pliance pursuant to section 2(b)(2)(D)(ii); and 

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

17 such software. 

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

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

20 State. 

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

22 State’’— 

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

24 used under the Streamlined Sales and Use Tax 
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1 Agreement as in effect on the date of the enact2 ment of this Act; and 

3 (B) does not include any associate member 

4 under the Streamlined Sales and Use Tax 

5 Agreement. 

6 (4) PERSON.—The term ‘‘person’’ means an in7 dividual, trust, estate, fiduciary, partnership, cor8 poration, limited liability company, or other legal en9 tity, and a State or local government. 

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

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

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

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

14 or remit State or local sales and use taxes unless 

15 provided by this Act. 

16 (6) REMOTE SELLER.—The term ‘‘remote sell17 er’’ means a person that makes remote sales in the 

18 State. 

19 (7) SOURCED.—For purposes of a State grant20 ed authority under section 2(b), the location to 

21 which a remote sale is sourced refers to the location 

22 where the product or service sold is received by the 

23 purchaser, based on the location indicated by in24 structions for delivery that the purchaser furnishes 

25 to the seller. When no delivery location is specified, 
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1 the remote sale is sourced to the customer’s address 

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

3 obtained by the seller during the consummation of 

4 the transaction, including the address of the cus5 tomer’s payment instrument if no other address is 

6 available. If an address is unknown and a billing ad7 dress cannot be obtained, the remote sale is sourced 

8 to the address of the seller from which the remote 

9 sale was made. A State granted authority under sec10 tion 2(a) shall comply with the sourcing provisions 

11 of the Streamlined Sales and Use Tax Agreement. 

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

13 the several States, the District of Columbia, the 

14 Commonwealth of Puerto Rico, Guam, American 

15 Samoa, the United States Virgin Islands, the Com16 monwealth of the Northern Mariana Islands, and 

17 any other territory or possession of the United 

18 States, and any tribal organization (as defined in 

19 section 4 of the Indian Self-Determination and Edu20 cation Assistance Act (25 U.S.C. 450b)). 

21 (9) STREAMLINED SALES AND USE TAX AGREE22 MENT.—The term ‘‘Streamlined Sales and Use Tax 

23 Agreement’’ means the multi-State agreement with 

24 that title adopted on November 12, 2002, as in ef-
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1 fect on the date of the enactment of this Act and as 

2 further amended from time to time. 

3 SEC. 5. SEVERABILITY. 

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

5 provision to any person or circumstance is held to be un6 constitutional, the remainder of this Act and the applica7 tion of the provisions of such to any person or cir8 cumstance shall not be affected thereby. 

9 SEC. 6. PREEMPTION. 

10 Except as otherwise provided in this Act, this Act 

11 shall not be construed to preempt or limit any power exer12 cised or to be exercised by a State or local jurisdiction 

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

14 any other Federal law. 

Passed the Senate May 6, 2013. 

Attest: 

Secretary. 

113TH CONGRESS 

1ST SESSION S. 743 

AN ACT 

To restore States’ sovereign rights to enforce State 

purposes. and local sales and use tax laws, and for other