II 

Calendar No. 467 

113TH CONGRESS 

2D SESSION S. 2609 

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 

JULY 15, 2014 

Mr. ENZI (for himself, Mr. DURBIN, Mr. ALEXANDER, Ms. HEITKAMP, Ms. 

COLLINS, Mr. PRYOR, Ms. LANDRIEU, Mr. BLUNT, Mr. REED, Mr. 

WHITEHOUSE, Mr. CARDIN, Mr. JOHNSON of South Dakota, Ms. KLOBUCHAR, and Mr. FRANKEN) introduced the following bill; which was 

read the first time 

JULY 16, 2014 

Read the second time and placed on the calendar 

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 and Inter5 net Tax Fairness Act’’. 


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1 TITLE I—MARKETPLACE 

2 FAIRNESS 

3 SEC. 101. AUTHORIZATION TO REQUIRE COLLECTION OF 

4 SALES AND USE TAXES. 

5 (a) STREAMLINED SALES AND USE TAX AGREE6 MENT.—Each Member State under the Streamlined Sales 

7 and Use Tax Agreement is authorized to require all sellers 

8 not qualifying for the small seller exception described in 

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

10 respect to remote sales sourced to that Member State pur11 suant to the provisions of the Streamlined Sales and Use 

12 Tax Agreement, but only if any changes to the Stream13 lined Sales and Use Tax Agreement made after the date 

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

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

16 Subject to section 102(h), a State may exercise authority 

17 under this title beginning 180 days after the State pub18 lishes notice of the State’s intent to exercise the authority 

19 under this title. 

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 sellers not qualifying for the small seller 

24 exception described in subsection (c) to collect and remit 

25 sales and use taxes with respect to remote sales sourced 


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

2 the minimum simplification requirements in paragraph 

3 (2). Subject to section 102(h), such authority shall com4 mence beginning no earlier than the first day of the cal5 endar quarter that is at least 6 months after the date that 

6 the State— 

7 (1) enacts legislation to exercise the authority 

8 granted by this title— 

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 title shall not apply; and 

16 (2) implements each of the following minimum 

17 simplification requirements: 

18 (A) Provide, with respect to all remote 

19 sales sourced to the State— 

20 (i) a single entity within the State re21 sponsible for all State and local sales and 

22 use tax administration, return processing, 

23 and audits; 


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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 title. 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 with respect to prod21 ucts and services to which paragraph (1)(B) 

22 does not apply. 

23 (C) Source all remote sales in compliance 

24 with the sourcing definition set forth in section 

25 103(7). 


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1 (D)(i) Make publicly available information 

2 indicating the taxability of products and serv3 ices along with any product and service exemp4 tions from sales and use tax in the State and 

5 a rates and boundary database. 

6 (ii) Provide software free of charge for re7 mote sellers that calculates sales and use taxes 

8 due on each transaction at the time the trans9 action is completed, that files sales and use tax 

10 returns, and that is updated to reflect any rate 

11 changes and any changes to the products and 

12 services specified under paragraph (1)(B), as 

13 described in subparagraph (H); and 

14 (iii) Establish certification procedures for 

15 persons to be approved as certified software 

16 providers, with any software provided by such 

17 providers to be capable of calculating and filing 

18 sales and use taxes in all States qualified under 

19 this title. 

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 any 

17 rate change or any change to the products and 

18 services specified under paragraph (1)(B) by 

19 the State or any locality in the State and up20 date the information described in subparagraph 

21 (D)(i) accordingly and relieve any remote seller 

22 or certified software provider from liability for 

23 collecting sales and use taxes at the imme24 diately preceding effective rate during the 90- 


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1 day notice period if the required notice is not 

2 provided. 

3 (c) SMALL SELLER EXCEPTION.—A State is author4 ized to require a remote seller to collect sales and use taxes 

5 under this title only if the remote seller has gross annual 

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

7 preceding calendar year exceeding $1,000,000. For pur8 poses of determining whether the threshold in this section 

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

10 or more persons shall be aggregated if— 

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

12 within the meaning of subsections (b) and (c) of sec13 tion 267 or section 707(b)(1) of the Internal Rev14 enue Code of 1986; or 

15 (2) such persons have 1 or more ownership re16 lationships and such relationships were designed 

17 with a principal purpose of avoiding the application 

18 of these rules. 

19 SEC. 102. LIMITATIONS. 

20 (a) IN GENERAL.—Nothing in this title shall be con21 strued as— 

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

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

24 taxes, other than sales and use taxes; 

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


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1 (3) enlarging or reducing State authority to im2 pose such taxes. 

3 (b) NO EFFECT ON NEXUS.—This title shall not be 

4 construed to create any nexus or alter the standards for 

5 determining nexus between a person and a State or local6 ity. 

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

8 this title shall be construed to deny the ability of a remote 

9 seller to deploy and utilize a certified software provider 

10 of the seller’s choice. 

11 (d) LICENSING AND REGULATORY REQUIRE12 MENTS.—Nothing in this title shall be construed as per13 mitting or prohibiting a State from— 

14 (1) licensing or regulating any person; 

15 (2) requiring any person to qualify to transact 

16 intrastate business; 

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

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

19 (4) exercising authority over matters of inter20 state commerce. 

21 (e) NO NEW TAXES.—Nothing in this title shall be 

22 construed as encouraging a State to impose sales and use 

23 taxes on any products or services not subject to taxation 

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


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1 (f) NO EFFECT ON INTRASTATE SALES.—The provi2 sions of this title shall apply only to remote sales and shall 

3 not apply to intrastate sales or intrastate sourcing rules. 

4 States granted authority under section 101(a) shall com5 ply with all intrastate provisions of the Streamlined Sales 

6 and Use Tax Agreement. 

7 (g) NO EFFECT ON MOBILE TELECOMMUNICATIONS

8 SOURCING ACT.—Nothing in this title shall be construed 

9 as altering in any manner or preempting the Mobile Tele10 communications Sourcing Act (4 U.S.C. 116–126). 

11 (h) LIMITATION ON INITIAL COLLECTION OF SALES

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

13 not begin to exercise the authority under this title— 

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

15 of the enactment of this Act; and 

16 (2) during the period beginning October 1 and 

17 ending on December 31 of the first calendar year 

18 beginning after the date of the enactment of this 

19 Act. 

20 SEC. 103. DEFINITIONS AND SPECIAL RULES. 

21 In this title: 

22 (1) CERTIFIED SOFTWARE PROVIDER.—The 

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

24 that— 


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1 (A) provides software to remote sellers to 

2 facilitate State and local sales and use tax com3 pliance pursuant to section 101(b)(2)(D)(ii); 

4 and 

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

6 such software. 

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

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

9 State. 

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

11 State’’— 

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

13 used under the Streamlined Sales and Use Tax 

14 Agreement as in effect on the date of the enact15 ment of this Act; and 

16 (B) does not include any associate member 

17 under the Streamlined Sales and Use Tax 

18 Agreement. 

19 (4) PERSON.—The term ‘‘person’’ means an in20 dividual, trust, estate, fiduciary, partnership, cor21 poration, limited liability company, or other legal en22 tity, and a State or local government. 

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

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

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


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

2 or remit State or local sales and use taxes unless 

3 provided by this title. 

4 (6) REMOTE SELLER.—The term ‘‘remote sell5 er’’ means a person that makes remote sales in the 

6 State. 

7 (7) SOURCED.—For purposes of a State grant8 ed authority under section 101(b), the location to 

9 which a remote sale is sourced refers to the location 

10 where the product or service sold is received by the 

11 purchaser, based on the location indicated by in12 structions for delivery that the purchaser furnishes 

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

14 the remote sale is sourced to the customer’s address 

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

16 obtained by the seller during the consummation of 

17 the transaction, including the address of the cus18 tomer’s payment instrument if no other address is 

19 available. If an address is unknown and a billing ad20 dress cannot be obtained, the remote sale is sourced 

21 to the address of the seller from which the remote 

22 sale was made. A State granted authority under sec23 tion 101(a) shall comply with the sourcing provisions 

24 of the Streamlined Sales and Use Tax Agreement. 


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1 (8) STATE.—The term ‘‘State’’ means each 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, and 

6 any other territory or possession of the United 

7 States, and any tribal organization (as defined in 

8 section 4 of the Indian Self-Determination and Edu9 cation Assistance Act (25 U.S.C. 450b)). 

10 (9) STREAMLINED SALES AND USE TAX AGREE11 MENT.—The term ‘‘Streamlined Sales and Use Tax 

12 Agreement’’ means the multi-State agreement with 

13 that title adopted on November 12, 2002, as in ef14 fect on the date of the enactment of this Act and as 

15 further amended from time to time. 

16 SEC. 104. SEVERABILITY. 

17 If any provision of this title or the application of such 

18 provision to any person or circumstance is held to be un19 constitutional, the remainder of this title and the applica20 tion of the provisions of such to any person or cir21 cumstance shall not be affected thereby. 

22 SEC. 105. PREEMPTION. 

23 Except as otherwise provided in this title, this title 

24 shall not be construed to preempt or limit any power exer25 cised or to be exercised by a State or local jurisdiction 


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

2 any other Federal law. 

3 TITLE II—INTERNET TAX 

4 FREEDOM ACT 

5 SEC. 201. EXTENSION OF INTERNET TAX FREEDOM ACT. 

6 (a) IN GENERAL.—Section 1101(a) of the Internet 

7 Tax Freedom Act (47 U.S.C. 151 note) is amended by 

8 striking ‘‘November 1, 2014’’ and inserting ‘‘November 1, 

9 2024’’. 

10 (b) GRANDFATHERING OF STATES THAT TAX INTER11 NET ACCESS.—Section 1104(a)(2)(A) of such Act is 

12 amended by striking ‘‘November 1, 2014’’ and inserting 

13 ‘‘November 1, 2024’’. 


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Calendar No. 467 

113TH CONGRESS 

2D SESSION S. 2609 

A BILL 

To restore States’ sovereign rights to enforce State 

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

JULY 16, 2014 

Read the second time and placed on the calendar 


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