I 

115TH CONGRESS 

1ST SESSION H. R. 2193 

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 

APRIL 27, 2017 

Mrs. NOEM (for herself, Mr. WOMACK, Mr. CHAFFETZ, Mr. STIVERS, Mr. 

BARLETTA, Mr. CONYERS, Ms. SPEIER, Ms. DELBENE, Mr. WELCH, and 

Mr. CICILLINE) 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 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 notwithstanding 

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

3 qualifying for the small remote seller exception described 

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

5 with respect to remote sales sourced to that Member State 

6 pursuant to the provisions of the Streamlined Sales and 

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

8 Streamlined Sales and Use Tax Agreement made after the 

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

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

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

12 day of a month beginning 180 days after the State pub13 lishes notice of the State’s intent to exercise the authority 

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

15 section 3(h). 

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 remote sellers not qualifying for the 

20 small remote seller exception described in subsection (c) 

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

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

23 adopts and implements the minimum simplification re24 quirements in paragraph (2). Such authority shall only 

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


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

2 is at least 180 days after the date that 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) except as provided in clause (iii) 

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

22 seller for all State and local taxing juris23 dictions within that State; 

24 (iii) unless there is reasonable sus25 picion that the remote seller has engaged 


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1 in intentional misrepresentation, if a re2 mote seller utilizes a certified software pro3 vider as described in section 4(1), the 

4 State requesting the audit shall, at the op5 tion of the remote seller, first contact the 

6 certified software provider who shall have 

7 the responsibility to provide the State with 

8 complete records of transactions processed 

9 for the remote seller and who will rep10 resent the remote seller during the State’s 

11 audit and be responsible for the audit find12 ings except as provided in subparagraphs 

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

14 prevent the remote seller from contesting 

15 audit findings, and the remote seller uti16 lizing a certified software provider shall 

17 not be contacted by a State requesting an 

18 audit unless the remote seller either was 

19 reasonably suspected of intentional mis20 representation or has declined to have a 

21 certified software provider represent it dur22 ing the audit.); and 

23 (iv) 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 No local jurisdiction may require a remote sell7 er to submit a sales and use tax return or to 

8 collect sales and use taxes other than as pro9 vided by this paragraph. 

10 (B) Provide a uniform sales and use tax 

11 base among the State and the local taxing juris12 dictions within the State pursuant to paragraph 

13 (1). 

14 (C) Source all remote sales in compliance 

15 with the sourcing definition set forth in section 

16 4(10). 

17 (D) Provide— 

18 (i) a publicly available taxability and 

19 exemption table which can be downloaded 

20 in an easily usable format and accessed 

21 electronically which indicates the taxability 

22 of products and services along with any 

23 product and service exemptions from sales 

24 and use tax in the State, and which is up25 dated each calendar quarter for any 


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1 changes to the products and services speci2 fied under paragraph (1)(B); 

3 (ii) a rates and boundary database in 

4 an easily downloadable format and which is 

5 updated each calendar quarter for rate and 

6 boundary changes; 

7 (iii) free access to all of the national 

8 certified software providers that have been 

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

10 that can determine the proper sales and 

11 use tax in every State qualified under this 

12 Act and that will— 

13 (I) determine the correct sales 

14 and use tax rate based on sourcing 

15 rules in section 4(10) and calculate 

16 the sales and use tax due at the time 

17 of sale; 

18 (II) generate and file sales and 

19 use tax returns electronically; 

20 (III) remit the sales and use 

21 taxes to States electronically; 

22 (IV) report all transactions proc23 essed to the remote seller; 


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1 (V) respond to sales and use tax 

2 audit requests by States for remote 

3 sellers; and 

4 (VI) provide safeguards and pro5 tection of consumer privacy in any 

6 data stored by the certified software 

7 provider; and 

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

10 providers. 

11 Such free access shall include installation, setup 

12 and maintenance of the automated system into 

13 the remote seller’s system. For purposes of 

14 clause (iii), the software provided by national 

15 certified software providers shall be capable of 

16 calculating and filing sales and use taxes in all 

17 States qualified under this Act. 

18 (E) Relieve remote sellers from liability to 

19 the State or locality for the incorrect collection, 

20 remittance, or noncollection of sales and use 

21 taxes, including any penalties or interest, if the 

22 liability is the result of an error or omission 

23 made by a certified software provider unless the 

24 error or omission is the result of misleading, in25 complete, or inaccurate information provided to 


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1 the certified software provider by the remote 

2 seller. 

3 (F) Relieve certified software providers 

4 from liability to the State or locality for the in5 correct collection, remittance, or noncollection 

6 of sales and use taxes, including any penalties 

7 or interest, if the liability is the result of mis8 leading, incomplete, or inaccurate information 

9 provided by a remote seller. 

10 (G) Relieve remote sellers and certified 

11 software providers from liability to the State or 

12 locality for incorrect collection, remittance, or 

13 noncollection of sales and use taxes, including 

14 any penalties or interest, if the liability is the 

15 result of incorrect information or software pro16 vided or certified by the State. 

17 (H) Provide remote sellers and certified 

18 software providers with 90-days notice of rate 

19 and boundary changes and any changes to the 

20 products and services specified under paragraph 

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

22 and update the information described in clauses 

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

24 and relieve any remote seller or certified soft25 ware provider from liability for collecting sales 


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1 and use taxes at the immediately preceding ef2 fective rate during the 90-day notice period if 

3 the required notice is not provided. 

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

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

6 State itself, to pursue a cause of action against 

7 a seller for under-collected or over-collected 

8 sales or use tax: 

9 (i) That a person, other than the 

10 State itself, may not pursue any cause of 

11 action against a remote seller for under12 collected or over-collected sales or use tax 

13 unless the remote seller has received writ14 ten notice from the person that the remote 

15 seller has over-collected or under-collected 

16 sales and use tax, the notice contains in17 formation sufficient to determine the valid18 ity of the refund request or asserted 

19 under-collection, and the remote seller has 

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

21 refunded affected customers the amount of 

22 the over-collected sales and use tax or paid 

23 the under-collected amount of sales and 

24 use tax to the State. No penalties may be 

25 imposed during the 60-day period in excess 


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1 of the penalties that would otherwise be 

2 imposed by the State had no notice been 

3 provided pursuant to this paragraph. 

4 (ii) That a notice of over-collection 

5 from a person is only valid if received with6 in the applicable statute of limitations for 

7 filing refunds for sales and use tax, and 

8 that a notice of under-collection from a 

9 person is only valid if received within the 

10 applicable statute of limitations for assess11 ing underpayments of sales and use tax. 

12 (iii) That a person, other than the 

13 State itself, may not pursue any cause of 

14 action against a certified software provider 

15 for its activities conducted for a remote 

16 seller described in clause (i) unless the re17 mote seller provides a copy of the written 

18 notice to the certified software provider 

19 within a reasonable time for the certified 

20 software provider to be able to assist the 

21 remote seller in making the payments with22 in the timeframe described in clause (i). 

23 (iv) That a person, other than the 

24 State itself, may pursue a cause of action 

25 against a remote seller for under-collected 


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1 or over-collected sales or use tax if the re2 mote seller knew or should have known 

3 that it had under-collected or over-collected 

4 and did not, within 60 days of its deter5 mination, refund affected customers the 

6 amount of the over-collected sales and use 

7 tax or pay the amount of under-collected 

8 sales and use tax to the State. 

9 (J) Accepts registrations at no charge to 

10 certified software provider or remote seller from 

11 a central online registration system that allows 

12 a remote seller to register to collect and remit 

13 sales and use taxes in all States that have exer14 cised authority under this Act. 

15 (K) Relieve remote sellers and certified 

16 software providers, except in cases of fraud, 

17 from liability for tax, penalty, and interest on 

18 transactions if the purchaser provides to the re19 mote seller the necessary documentation to 

20 claim an exemption within 90 days of the sale. 

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

22 (1) COLLECTION AUTHORIZED.—A State is au23 thorized to require the collection of sales and use 

24 taxes by a remote seller under this Act only as fol25 lows: 


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

2 effective date, if the remote seller— 

3 (i) has gross annual receipts exceed4 ing $10,000,000 in the calendar year pre5 ceding the date of enactment; or 

6 (ii) utilizes an electronic marketplace 

7 for the purpose of making products or 

8 services available for sale to the public. 

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

10 effective date, if the remote seller— 

11 (i) has gross annual receipts exceed12 ing $5,000,000 in the immediately pre13 ceding calendar year; or 

14 (ii) utilizes an electronic marketplace 

15 for the purpose of making products or 

16 services available for sale to the public. 

17 (C) For the 3d calendar year following the 

18 effective date, if the remote seller— 

19 (i) has gross annual receipts exceed20 ing $1,000,000 in the immediately pre21 ceding calendar year; or 

22 (ii) utilizes an electronic marketplace 

23 for the purpose of making products or 

24 services available for sale to the public. 


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1 (2) DETERMINATION OF THRESHOLD.—For 

2 purposes of determining whether the threshold in 

3 this paragraph (1) is met— 

4 (A) the sales of all persons related within 

5 the meaning of subsections (b) and (c) of sec6 tion 267, or section 707(b)(1), of the Internal 

7 Revenue Code of 1986 shall be aggregated; or 

8 (B) persons with one or more ownership 

9 relationships shall also be aggregated if such re10 lationships were designed with a principal pur11 pose of avoiding the application of these rules. 

12 SEC. 3. LIMITATIONS. 

13 (a) IN GENERAL.—Nothing in this Act shall be con14 strued as— 

15 (1) subjecting a remote seller or any other per16 son to franchise, income, occupation, or any other 

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

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

19 (3) enlarging or reducing State authority to im20 pose such taxes. 

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

22 construed to create any nexus between a person and a 

23 State or locality. 


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1 (c) LICENSING AND REGULATORY REQUIREMENTS.— 

2 Nothing in this Act shall be construed as permitting or 

3 prohibiting a State from— 

4 (1) licensing or regulating any person; 

5 (2) requiring any person to qualify to transact 

6 intrastate business; 

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

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

9 (4) exercising authority over matters of inter10 state commerce. 

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

12 construed as encouraging a State to impose sales and use 

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

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

15 (e) NO EFFECT ON INTRASTATE SALES.—The provi16 sions of this Act shall apply only to remote sales and shall 

17 not apply to intrastate sales or intrastate sourcing rules. 

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

19 with all intrastate provisions of the Streamlined Sales and 

20 Use Tax Agreement. 

21 (f) NO EFFECT ON MOBILE TELECOMMUNICATIONS

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

23 as altering in any manner or preempting the Mobile Tele24 communications Sourcing Act (4 U.S.C. 116–126). 


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1 (g) CERTIFICATION REQUIREMENTS.—A State may 

2 not exercise authority under this Act unless the following 

3 requirements are satisfied: 

4 (1) The State provides certification procedures 

5 for persons to be approved as certified software pro6 viders. A State may delegate the certification proce7 dures so long as the State retains final approval over 

8 any certification decisions. 

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

10 revoke certification to a software provider without a 

11 reasonable basis, or arbitrarily or capriciously. A 

12 State must complete the certification review of the 

13 software provider no later than the first day of the 

14 calendar quarter that is at least 180 days after the 

15 software provider requests certification by that 

16 State. 

17 (3) The State has certified multiple national 

18 certified software providers, and the certifications 

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

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

21 utilize a certified software provider of the seller’s 

22 choice. 

23 (4) The State provides compensation for cer24 tified software providers. A State may delegate the 

25 authority to negotiate the compensation so long as 


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1 the State retains final approval of the compensation 

2 rate(s). 

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 title— 

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 (i) LIMITATION ON AUDITS OF REMOTE SELLERS.— 

13 A State exercising authority under this Act— 

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

15 (A) has registered in the State under sec16 tion 2(b)(2)(J); and 

17 (B) has gross annual receipts of less than 

18 $5,000,000 in the taxable year as aggregated in 

19 subsection (c) of section 2, 

20 unless there is reasonable suspicion that such remote 

21 seller has engaged in intentional misrepresentation 

22 or fraud; and 

23 (2) may not have audits of remote sellers con24 ducted by persons whose compensation is contingent 

25 upon audit findings. 


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1 (j) LIMITATION ON TIME PERIOD TO ASSESS RE2 MOTE SELLERS AND CERTIFIED SOFTWARE PRO3 VIDERS.—A State may not hold a remote seller or certified 

4 software provider liable for the incorrect collection, remit5 tance, or noncollection of sales and use taxes, including 

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

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

8 3 years after the later of the due date or the filing of 

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

10 use tax assessed. 

11 (k) REMOTE SELLER COMPENSATION.—A State 

12 must provide remote sellers with compensation equaling 

13 no less than the amount, if any, the State provides to non14 remote sellers within the State. 

15 SEC. 4. DEFINITIONS AND SPECIAL RULES. 

16 In this Act: 

17 (1) CERTIFIED SOFTWARE PROVIDER.—The 

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

19 that— 

20 (A) provides software or access to software 

21 to remote sellers to facilitate State and local 

22 sales and use tax compliance; and 

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

24 behalf to so provide such software. 


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

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

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

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

5 Act falls during the period beginning October 1 and 

6 ending on December 31, the effective date shall be 

7 January 1 of the immediately following year. 

8 (3) ELECTRONIC MARKETPLACE.—The term 

9 ‘‘electronic marketplace’’ means a digital marketing 

10 platform where— 

11 (A) products or services are offered for 

12 sale by more than 1 remote seller; and 

13 (B) buyers may purchase such products or 

14 services through a common system of financial 

15 transaction processing. 

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

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

18 State. 

19 (5) MEMBER STATE.—The term ‘‘Member 

20 State’’— 

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

22 used under the Streamlined Sales and Use Tax 

23 Agreement as in effect on the date of the enact24 ment of this Act; and 


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1 (B) does not include any associate member 

2 or a member that is not a full member under 

3 the Streamlined Sales and Use Tax Agreement. 

4 (6) NATIONAL CERTIFIED SOFTWARE PRO5 VIDER.—The term ‘‘national certified software pro6 vider’’ means a certified software provider that has 

7 been certified by all States that are certifying 

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

9 generally applicable sales and use tax, that has met 

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

11 and that has not violated the requirements set forth 

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

13 is a national certified software provider, it shall not 

14 lose its status as such when a State becomes a certi15 fying State so long as the national certified software 

16 provider requested certification from the new certi17 fying State within 30 days from the date that the 

18 State became a certifying State and the certifying 

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

20 (7) PERSON.—The term ‘‘person’’ means an in21 dividual, trust, estate, fiduciary, partnership, cor22 poration, limited liability company, or other legal en23 tity, and a State or local government. 

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

25 means a sale that originates in one State and is 


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1 sourced to another State as provided in section 

2 4(10) which the seller would not legally be required 

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

4 taxes without the authority provided by this Act. 

5 (9) REMOTE SELLER.—The term ‘‘remote sell6 er’’ means a person that makes remote sales in the 

7 State without a physical presence. For purposes of 

8 this paragraph, a person has a physical presence in 

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

10 the State include any of the following during such 

11 person’s taxable year: 

12 (A) Being an individual physically in the 

13 State, or assigning one or more employees to be 

14 in the State. 

15 (B) Using the services of an agent (exclud16 ing an employee) to establish or maintain the 

17 market in the State, if such agent does not per18 form business services in the State for any 

19 other person during such taxable year. 

20 (C) The leasing or owning of tangible per21 sonal property or of real property in the State. 

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

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

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

25 number of days if provided by State law), or presVerDate Sep 11 2014 04:24 Apr 29, 2017 Jkt 069200 PO 00000 Frm 00020 Fmt 6652 Sfmt 6201 E:\BILLS\H2193.IH H2193

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1 ence in a State to conduct limited or transient busi2 ness activity. 

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

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

5 which a remote sale is sourced refers to the location 

6 where the product or service sold is received by the 

7 purchaser, based on the location indicated by in8 structions for delivery that the purchaser furnishes 

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

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

11 including the customer’s place of primary use that 

12 is either known to the seller or, if not known, ob13 tained by the seller during the consummation of the 

14 transaction, including the address of the customer’s 

15 payment instrument if no other address is available. 

16 If an address or place of primary use is unknown 

17 and a billing address cannot be obtained, the remote 

18 sale is sourced to the address of the seller from 

19 which the remote sale was made. The term ‘‘re20 ceived’’ means taking possession of product or mak21 ing first use of services. A State granted authority 

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

23 provisions of the Streamlined Sales and Use Tax 

24 Agreement. 


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

2 the several States, the District of Columbia, the 

3 Commonwealth of Puerto Rico, Guam, American 

4 Samoa, the United States Virgin Islands, the Com5 monwealth of the Northern Mariana Islands, or any 

6 territory or possession of the United States. 

7 (12) STREAMLINED SALES AND USE TAX

8 AGREEMENT.—The term ‘‘Streamlined Sales and 

9 Use Tax Agreement’’ means the multistate agree10 ment with that title adopted on November 12, 2002, 

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

12 and as further amended from time to time. 

13 SEC. 5. SEVERABILITY. 

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

15 provision to any person or circumstance, is held to be un16 constitutional, then the remainder of this Act, and the ap17 plication of the provisions of such to any person or cir18 cumstance, shall not be affected thereby. 

Æ 


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