II 

116TH CONGRESS 

1ST SESSION S. 2350 

To prohibit States from retroactively imposing a sales tax collection duty 

on a remote seller, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 31, 2019 

Mrs. SHAHEEN (for herself, Mr. WYDEN, Ms. HASSAN, and Mr. MERKLEY) 

introduced the following bill; which was read twice and referred to the 

Committee on Finance 

A BILL 

To prohibit States from retroactively imposing a sales tax 

collection duty on a remote seller, 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 ‘‘Online Sales Simplicity 

5 and Small Business Relief Act of 2019’’. 

6 SEC. 2. BAN ON RETROACTIVE TAXATION OF INTERNET 

7 COMMERCE. 

8 A State may not impose a sales tax collection duty 

9 on a remote seller for any sale that occurred prior to June 

10 21, 2018. 


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1 SEC. 3. ORDERLY PHASE-IN OF COMPLIANCE OBLIGATIONS. 

2 A State may impose a sales tax collection duty on 

3 a remote seller only for a sale that occurs after January 

4 1, 2021. 

5 SEC. 4. SMALL BUSINESS REMOTE SELLER EXEMPTION. 

6 In the case of a sale made by a small business remote 

7 seller, no State may impose a sales tax collection duty on 

8 any person other than the purchaser if the sale is made 

9 on or after June 21, 2018, and before the date that is 

10 30 days after the date on which the States develop and 

11 Congress approves an interstate compact, applicable to the 

12 State and sale, governing the imposition of tax collection 

13 duties on remote sellers. 

14 SEC. 5. SENSE OF CONGRESS. 

15 It is the sense of Congress that the States should de16 velop an interstate compact for the collection of sales tax 

17 by remote sellers that identifies a clearly defined minimum 

18 substantial nexus between the remote seller and the taxing 

19 State, that simplifies registration, collection, remittance, 

20 auditing, and other compliance processes to the greatest 

21 extent possible in order to avoid undue burdens on inter22 state commerce, and that, due to such simplification, 

23 eliminates the need for the continuation of the small busi24 ness remote seller exemption under section 4. 

25 SEC. 6. DEFINITIONS. 

26 In this Act: 


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1 (1) REMOTE SELLER.—The term ‘‘remote sell2 er’’ means a person without a physical presence in 

3 the State who makes a sale in the State. 

4 (2) PHYSICAL PRESENCE.— 

5 (A) IN GENERAL.—Except as provided in 

6 subparagraph (B), the term ‘‘physical presence’’ 

7 means, with respect to a person, that a person’s 

8 business activities in the State include any of 

9 the following during such person’s taxable year: 

10 (i) Being an individual physically in 

11 the State, or assigning one or more em12 ployees to be in the State. 

13 (ii) Using the services of an agent (ex14 cluding an employee) to establish or main15 tain a market in the State, if such agent 

16 does not perform business services in the 

17 State for any other person during such 

18 taxable year. 

19 (iii) The leasing or owning of tangible 

20 personal property (other than digital or al21 phanumeric data) or of real property in the 

22 State. 

23 (B) EXCEPTION.—A person does not have 

24 physical presence in a State if the person’s 

25 physical presence in the State under subparaVerDate Sep 11 2014 00:54 Aug 08, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2350.IS S2350

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1 graph (A) was for less than 15 days in a tax2 able year (or a greater number of days if pro3 vided by State law), or if the person’s physical 

4 presence in the State was solely for the purpose 

5 of conducting limited or transient business ac6 tivity. 

7 (3) SALES TAX COLLECTION DUTY.—The term 

8 ‘‘sales tax collection duty’’ means— 

9 (A) an obligation imposed on a person, in10 cluding a person other than the actual seller, 

11 to— 

12 (i) pay or collect a sales, use, or simi13 lar tax upon the sale of a good or service; 

14 or 

15 (ii) report any information with re16 spect to such sale of a good or service; or 

17 (B) the assessment of a sales, use, or simi18 lar tax on a person. 

19 (4) SMALL BUSINESS REMOTE SELLER.—The 

20 term ‘‘small business remote seller’’ means a remote 

21 seller with gross annual receipts in the United 

22 States during the preceding calendar year in an 

23 amount that is not more than $10,000,000. 

Æ 


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