I 

114TH CONGRESS 

1ST SESSION H. R. 2775 

To grant States authority to enforce State and local sales and use tax 

laws on remote transactions, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 15, 2015 

Mr. CHAFFETZ (for himself, Mr. WOMACK, Mrs. NOEM, Mr. CONYERS, Ms. 

SPEIER, Mr. WELCH, Mr. STIVERS, Ms. DELBENE, Mr. DOLD, Mr. 

RIGELL, Mrs. ELLMERS of North Carolina, Mr. CURBELO of Florida, Mr. 

BARLETTA, Mr. DEUTCH, Mr. LARSON of Connecticut, Mr. KILMER, and 

Mr. JOHNSON of Georgia) introduced the following bill; which was referred to the Committee on the Judiciary 

A BILL 

To grant States authority to enforce State and local sales 

and use tax laws on remote transactions, 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 ‘‘Remote Transactions 

5 Parity Act of 2015’’. 


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1 SEC. 2. AUTHORIZATION TO REQUIRE COLLECTION OF 

2 SALES AND USE TAXES. 

3 (a) STREAMLINED SALES AND USE TAX AGREE4 MENT.—Each Member State under the Streamlined Sales 

5 and Use Tax Agreement is authorized notwithstanding 

6 any other provision of law to require all remote sellers not 

7 qualifying for the small remote seller exception described 

8 in subsection (c) to collect and remit sales and use taxes 

9 with respect to remote sales sourced to that Member State 

10 pursuant to the provisions of the Streamlined Sales and 

11 Use Tax Agreement, but only if any changes to the 

12 Streamlined Sales and Use Tax Agreement made after the 

13 date of enactment of this Act, are not in conflict with the 

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

15 A State may exercise authority under this Act on the 1st 

16 day of a month beginning 180 days after the State pub17 lishes notice of the State’s intent to exercise the authority 

18 under this Act, but no earlier than the date provided in 

19 section 3(h). 

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

21 State under the Streamlined Sales and Use Tax Agree22 ment is authorized notwithstanding any other provision of 

23 law to require all remote sellers not qualifying for the 

24 small remote seller exception described in subsection (c) 

25 to collect and remit sales and use taxes with respect to 

26 remote sales sourced to that State, but only if the State 


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1 adopts and implements the minimum simplification re2 quirements in paragraph (2). Such authority shall only 

3 begin on the 1st day of a month and commence beginning 

4 no earlier than the first day of the calendar quarter that 

5 is at least 180 days after the date that the State— 

6 (1) enacts legislation to exercise the authority 

7 granted by this Act— 

8 (A) specifying the tax or taxes to which 

9 such authority and the minimum simplification 

10 requirements in paragraph (2) shall apply; and 

11 (B) specifying the products and services 

12 otherwise subject to the tax or taxes identified 

13 by the State under subparagraph (A) to which 

14 the authority of this Act shall not apply; and 

15 (2) implements each of the following minimum 

16 simplification requirements: 

17 (A) Provide— 

18 (i) a single entity within the State re19 sponsible for all State and local sales and 

20 use tax administration, return processing, 

21 and audits for remote sales sourced to the 

22 State; 

23 (ii) except as provided in clause (iii) 

24 and section 3(I), a single audit of a remote 


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1 seller for all State and local taxing juris2 dictions within that State; 

3 (iii) unless there is reasonable sus4 picion that the remote seller has engaged 

5 in intentional misrepresentation, if a re6 mote seller utilizes a certified software pro7 vider as described in section 4(1), the 

8 State requesting the audit shall, at the op9 tion of the remote seller, first contact the 

10 certified software provider who shall have 

11 the responsibility to provide the State with 

12 complete records of transactions processed 

13 for the remote seller and who will rep14 resent the remote seller during the State’s 

15 audit and be responsible for the audit find16 ings except as provided in subparagraphs 

17 (F), (G), and (H) (Nothing herein shall 

18 prevent the remote seller from contesting 

19 audit findings, and the remote seller uti20 lizing a certified software provider shall 

21 not be contacted by a State requesting an 

22 audit unless the remote seller either was 

23 reasonably suspected of intentional mis24 representation or has declined to have a 


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1 certified software provider represent it dur2 ing the audit.); and 

3 (iv) a single sales and use tax return 

4 to be used by remote sellers to be filed 

5 with the single entity responsible for tax 

6 administration. 

7 A State may not require a remote seller to file 

8 sales and use tax returns any more frequently 

9 than returns are required for nonremote sellers. 

10 No local jurisdiction may require a remote sell11 er to submit a sales and use tax return or to 

12 collect sales and use taxes other than as pro13 vided by this paragraph. 

14 (B) Provide a uniform sales and use tax 

15 base among the State and the local taxing juris16 dictions within the State pursuant to paragraph 

17 (1). 

18 (C) Source all remote sales in compliance 

19 with the sourcing definition set forth in section 

20 4(10). 

21 (D) Provide— 

22 (i) a publicly available taxability and 

23 exemption table which can be downloaded 

24 in an easily usable format and accessed 

25 electronically which indicates the taxability 


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1 of products and services along with any 

2 product and service exemptions from sales 

3 and use tax in the State, and which is up4 dated each calendar quarter for any 

5 changes to the products and services speci6 fied under paragraph (1)(B); 

7 (ii) a rates and boundary database in 

8 an easily downloadable format and which is 

9 updated each calendar quarter for rate and 

10 boundary changes; 

11 (iii) free access to all of the national 

12 certified software providers that have been 

13 approved pursuant to section (3)(g) and 

14 that can determine the proper sales and 

15 use tax in every State qualified under this 

16 Act and that will— 

17 (I) determine the correct sales 

18 and use tax rate based on sourcing 

19 rules in section 4(10) and calculate 

20 the sales and use tax due at the time 

21 of sale; 

22 (II) generate and file sales and 

23 use tax returns electronically; 

24 (III) remit the sales and use 

25 taxes to States electronically; 


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1 (IV) report all transactions proc2 essed to the remote seller; 

3 (V) respond to sales and use tax 

4 audit requests by States for remote 

5 sellers; and 

6 (VI) provide safeguards and pro7 tection of consumer privacy in any 

8 data stored by the certified software 

9 provider; and 

10 (iv) certification procedures for per11 sons to be approved as certified software 

12 providers. 

13 Such free access shall include installation, setup 

14 and maintenance of the automated system into 

15 the remote seller’s system. For purposes of 

16 clause (iii), the software provided by national 

17 certified software providers shall be capable of 

18 calculating and filing sales and use taxes in all 

19 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 unless the 


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1 error or omission is the result of misleading, in2 complete, or inaccurate information provided to 

3 the certified software provider by the remote 

4 seller. 

5 (F) Relieve certified software providers 

6 from liability to the State or locality for the in7 correct collection, remittance, or noncollection 

8 of sales and use taxes, including any penalties 

9 or interest, if the liability is the result of mis10 leading, incomplete, or inaccurate information 

11 provided by a remote seller. 

12 (G) Relieve remote sellers and certified 

13 software providers from liability to the State or 

14 locality for incorrect collection, remittance, or 

15 noncollection of sales and use taxes, including 

16 any penalties or interest, if the liability is the 

17 result of incorrect information or software pro18 vided or certified by the State. 

19 (H) Provide remote sellers and certified 

20 software providers with 90-days notice of rate 

21 and boundary changes and any changes to the 

22 products and services specified under paragraph 

23 (1)(B) by the State or any locality in the State 

24 and update the information described in clauses 

25 (i) and (ii) of subparagraph (D) accordingly 


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1 and relieve any remote seller or certified soft2 ware provider from liability for collecting sales 

3 and use taxes at the immediately preceding ef4 fective rate during the 90-day notice period if 

5 the required notice is not provided. 

6 (I) Provide the following, but only if the 

7 law of a State allows a person, other than the 

8 State itself, to pursue a cause of action against 

9 a seller for under-collected or over-collected 

10 sales or use tax: 

11 (i) That a person, other than the 

12 State itself, may not pursue any cause of 

13 action against a remote seller for under14 collected or over-collected sales or use tax 

15 unless the remote seller has received writ16 ten notice from the person that the remote 

17 seller has over-collected or under-collected 

18 sales and use tax, the notice contains in19 formation sufficient to determine the valid20 ity of the refund request or asserted 

21 under-collection, and the remote seller has 

22 not, within 60 days of receipt of the notice, 

23 refunded affected customers the amount of 

24 the over-collected sales and use tax or paid 

25 the under-collected amount of sales and 


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1 use tax to the State. No penalties may be 

2 imposed during the 60-day period in excess 

3 of the penalties that would otherwise be 

4 imposed by the State had no notice been 

5 provided pursuant to this paragraph. 

6 (ii) That a notice of over-collection 

7 from a person is only valid if received with8 in the applicable statute of limitations for 

9 filing refunds for sales and use tax, and 

10 that a notice of under-collection from a 

11 person is only valid if received within the 

12 applicable statute of limitations for assess13 ing underpayments of sales and use tax. 

14 (iii) That a person, other than the 

15 State itself, may not pursue any cause of 

16 action against a certified software provider 

17 for its activities conducted for a remote 

18 seller described in clause (i) unless the re19 mote seller provides a copy of the written 

20 notice to the certified software provider 

21 within a reasonable time for the certified 

22 software provider to be able to assist the 

23 remote seller in making the payments with24 in the time frame described in clause (i). 


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1 (iv) That a person, other than the 

2 State itself, may pursue a cause of action 

3 against a remote seller for under-collected 

4 or over-collected sales or use tax if the re5 mote seller knew or should have known 

6 that it had under-collected or over-collected 

7 and did not, within 60 days of its deter8 mination, refund affected customers the 

9 amount of the over-collected sales and use 

10 tax or pay the amount of under-collected 

11 sales and use tax to the State. 

12 (J) Accepts registrations at no charge to 

13 certified software provider or remote seller from 

14 a central online registration system that allows 

15 a remote seller to register to collect and remit 

16 sales and use taxes in all States that have exer17 cised authority under this Act. 

18 (K) Relieve remote sellers and certified 

19 software providers, except in cases of fraud, 

20 from liability for tax, penalty, and interest on 

21 transactions if the purchaser provides to the re22 mote seller the necessary documentation to 

23 claim an exemption within 90 days of the sale. 

24 (c) SMALL REMOTE SELLER PHASE-IN.— 


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1 (1) COLLECTION AUTHORIZED.—A State is au2 thorized to require the collection of sales and use 

3 taxes by a remote seller under this Act only as fol4 lows: 

5 (A) For the 1st calendar year following the 

6 effective date, if the remote seller— 

7 (i) has gross annual receipts exceed8 ing $10,000,000 in the calendar year pre9 ceding the date of enactment; or 

10 (ii) utilizes an electronic marketplace 

11 for the purpose of making products or 

12 services available for sale to the public. 

13 (B) For the 2d calendar year following the 

14 effective date, if the remote seller— 

15 (i) has gross annual receipts exceed16 ing $5,000,000 in the immediately pre17 ceding calendar year; or 

18 (ii) utilizes an electronic marketplace 

19 for the purpose of making products or 

20 services available for sale to the public. 

21 (c) For the 3d calendar year following the 

22 effective date, if the remote seller— 

23 (i) has gross annual receipts exceed24 ing $1,000,000 in the immediately pre25 ceding calendar year; or 


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1 (ii) utilizes an electronic marketplace 

2 for the purpose of making products or 

3 services available for sale to the public. 

4 (2) DETERMINATION OF THRESHOLD.—For 

5 purposes of determining whether the threshold in 

6 this paragraph (1) is met— 

7 (A) the sales of all persons related within 

8 the meaning of subsections (b) and (c) of sec9 tion 267, or section 707(b)(1), of the Internal 

10 Revenue Code of 1986 shall be aggregated; or 

11 (B) persons with 1 or more ownership rela12 tionships shall also be aggregated if such rela13 tionships were designed with a principal pur14 pose of avoiding the application of these rules. 

15 SEC. 3. LIMITATIONS. 

16 (a) IN GENERAL.—Nothing in this Act shall be con17 strued as— 

18 (1) subjecting a remote seller or any other per19 son to franchise, income, occupation, or any other 

20 type of taxes, other than sales and use taxes; 

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

22 (3) enlarging or reducing State authority to im23 pose such taxes. 


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

2 construed to create any nexus between a person and a 

3 State or locality. 

4 (c) LICENSING AND REGULATORY REQUIREMENTS.— 

5 Nothing in this Act shall be construed as permitting or 

6 prohibiting a State from— 

7 (1) licensing or regulating any person; 

8 (2) requiring any person to qualify to transact 

9 intrastate business; 

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

11 not related to the sale of goods or services; or 

12 (4) exercising authority over matters of inter13 state commerce. 

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

15 construed as encouraging a State to impose sales and use 

16 taxes on any goods or services not subject to a sales and 

17 use tax prior to the date of the enactment of this Act. 

18 (e) NO EFFECT ON INTRASTATE SALES.—The provi19 sions of this Act shall apply only to remote sales and shall 

20 not apply to intrastate sales or intrastate sourcing rules. 

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

22 with all intrastate provisions of the Streamlined Sales and 

23 Use Tax Agreement. 

24 (f) NO EFFECT ON MOBILE TELECOMMUNICATIONS

25 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 (g) CERTIFICATION REQUIREMENTS.—A State may 

4 not exercise authority under this Act unless the following 

5 requirements are satisfied: 

6 (1) The State provides certification procedures 

7 for persons to be approved as certified software pro8 viders. A State may delegate the certification proce9 dures so long as the State retains final approval over 

10 any certification decisions. 

11 (2) The State (or its delegate) does not deny or 

12 revoke certification to a software provider without a 

13 reasonable basis, or arbitrarily or capriciously. A 

14 State must complete the certification review of the 

15 software provider no later than the first day of the 

16 calendar quarter that is at least 180 days after the 

17 software provider requests certification by that 

18 State. 

19 (3) The State has certified multiple national 

20 certified software providers, and the certifications 

21 are in effect. Nothing in this Act shall be construed 

22 to deny the ability of a remote seller to deploy and 

23 utilize a certified software provider of the seller’s 

24 choice. 


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1 (4) The State provides compensation for cer2 tified software providers. A State may delegate the 

3 authority to negotiate the compensation so long as 

4 the State retains final approval of the compensation 

5 rate(s). 

6 (h) LIMITATION ON INITIAL COLLECTION OF SALES

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

8 not begin to exercise the authority under this title— 

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

10 of the enactment of this Act; and 

11 (2) during the period beginning October 1 and 

12 ending on December 31 of the first calendar year 

13 beginning after the date of the enactment of this 

14 Act. 

15 (i) LIMITATION ON AUDITS OF REMOTE SELLERS.— 

16 A State exercising authority under this Act— 

17 (1) may not audit a remote seller that— 

18 (A) has registered in the State under sec19 tion 2(b)(2)(J); and 

20 (B) has gross annual receipts of less than 

21 $5,000,000 in the taxable year as aggregated in 

22 subsection (c) of section 2; 

23 unless there is reasonable suspicion that such remote 

24 seller has engaged in intentional misrepresentation 

25 or fraud; and 


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1 (2) may not have audits of remote sellers con2 ducted by persons whose compensation is contingent 

3 upon audit findings. 

4 (j) LIMITATION ON TIME PERIOD TO ASSESS RE5 MOTE SELLERS AND CERTIFIED SOFTWARE PRO6 VIDERS.—A State may not hold a remote seller or certified 

7 software provider liable for the incorrect collection, remit8 tance, or noncollection of sales and use taxes, including 

9 any penalties or interest, if the liability is for a sales or 

10 use tax assessed under the authority of this Act more than 

11 3 years after the later of the due date or the filing of 

12 the sales and use tax return applicable to the sales and 

13 use tax assessed. 

14 (k) REMOTE SELLER COMPENSATION.—A State 

15 must provide remote sellers with compensation equaling 

16 no less than the amount, if any, the State provides to non17 remote sellers within the State. 

18 SEC. 4. DEFINITIONS AND SPECIAL RULES. 

19 In this Act: 

20 (1) CERTIFIED SOFTWARE PROVIDER.—The 

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

22 that— 

23 (A) provides software or access to software 

24 to remote sellers to facilitate State and local 

25 sales and use tax compliance; and 


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1 (B) is certified by a State or on a State’s 

2 behalf to so provide such software. 

3 (2) EFFECTIVE DATE.—The term ‘‘effective 

4 date’’ means the date that is 1 year after the date 

5 of the enactment of this Act. However, if the date 

6 that is 1 year after the date of the enactment of this 

7 Act falls during the period beginning October 1 and 

8 ending on December 31, the effective date shall be 

9 January 1 of the immediately following year. 

10 (3) ELECTRONIC MARKETPLACE.—The term 

11 ‘‘electronic marketplace’’ means a digital marketing 

12 platform where— 

13 (A) products or services are offered for 

14 sale by more than 1 remote seller; and 

15 (B) buyers may purchase such products or 

16 services through a common system of financial 

17 transaction processing. 

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

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

20 State. 

21 (5) 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 or a member that is not a full member under 

5 the Streamlined Sales and Use Tax Agreement. 

6 (6) NATIONAL CERTIFIED SOFTWARE PRO7 VIDER.—The term ‘‘national certified software pro8 vider’’ means a certified software provider that has 

9 been certified by all States that are certifying 

10 States. A ‘‘certifying State’’ is a State that has a 

11 generally applicable sales and use tax, that has met 

12 the requirements set forth under section 3(g)(1), 

13 and that has not violated the requirements set forth 

14 in section 3(g)(2). Once a certified software provider 

15 is a national certified software provider, it shall not 

16 lose its status as such when a State becomes a certi17 fying State so long as the national certified software 

18 provider requested certification from the new certi19 fying State within 30 days from the date that the 

20 State became a certifying State and the certifying 

21 State has not violated section 3(g)(2). 

22 (7) PERSON.—The term ‘‘person’’ means an in23 dividual, trust, estate, fiduciary, partnership, cor24 poration, limited liability company, or other legal en25 tity, and a State or local government. 


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1 (8) REMOTE SALE.—The term ‘‘remote sale’’ 

2 means a sale that originates in one State and is 

3 sourced to another State as provided in section 

4 4(10) which the seller would not legally be required 

5 to pay, collect, or remit State or local sales and use 

6 taxes without the authority provided by this Act. 

7 (9) REMOTE SELLER.—The term ‘‘remote sell8 er’’ means a person that makes remote sales in the 

9 State without a physical presence. For purposes of 

10 this paragraph, a person has a physical presence in 

11 a State only if such person’s business activities in 

12 the State include any of the following during such 

13 person’s tax able year: 

14 (A) Being an individual physically in the 

15 State, or assigning one or more employees to be 

16 in the State. 

17 (B) Using the services of an agent (exclud18 ing an employee) to establish or maintain the 

19 market in the State, if such agent does not per20 form business services in the State for any 

21 other person during such taxable year. 

22 (c) The leasing or owning of tangible per23 sonal property or of real property in the State. 

24 For purposes of this paragraph, the term ‘‘physical 

25 presence’ ’’ shall not include presence in a State for 


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1 less than 15 days in a taxable year (or a greater 

2 number of days if provided by State law), or pres3 ence in a State to conduct limited or transient busi4 ness activity. 

5 (10) SOURCED.—For purposes of a State 

6 granted authority under section 2(b), the location to 

7 which a remote sale is sourced refers to the location 

8 where the product or service sold is received by the 

9 purchaser, based on the location indicated by in10 structions for delivery that the purchaser furnishes 

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

12 the remote sale is sourced to the customer’s address, 

13 including the customer’s place of primary use that 

14 is either known to the seller or, if not known, ob15 tained by the seller during the consummation of the 

16 transaction, including the address of the customer’s 

17 payment instrument if no other address is available. 

18 If an address or place of primary use is unknown 

19 and a billing address cannot be obtained, the remote 

20 sale is sourced to the address of the seller from 

21 which the remote sale was made. The term ‘‘re22 ceived’’ means taking possession of product or mak23 ing first use of services. A State granted authority 

24 under section 2(a) shall comply with the sourcing 


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1 provisions of the Streamlined Sales and Use Tax 

2 Agreement. 

3 (11) STATE.—The term ‘‘State’’ means any of 

4 the several States, the District of Columbia, the 

5 Commonwealth of Puerto Rico, Guam, American 

6 Samoa, the United States Virgin Islands, the Com7 monwealth of the Northern Mariana Islands, or any 

8 territory or possession of the United States. 

9 (12) STREAMLINED SALES AND USE TAX

10 AGREEMENT.—The term ‘‘Streamlined Sales and 

11 Use Tax Agreement’’ means the multistate agree12 ment with that title adopted on November 12, 2002, 

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

14 and as further amended from time to time. 

15 SEC. 5. SEVERABILITY. 

16 If any provision of this Act, or the application of such 

17 provision to any person or circumstance, is held to be un18 constitutional, then the remainder of this Act, and the ap19 plication of the provisions of such to any person or cir20 cumstance, shall not be affected thereby. 

Æ 


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