I 

112TH CONGRESS 

1ST SESSION H. R. 3179 

To improve the States’ rights to enforce the collection of State sales and 

use tax laws, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

OCTOBER 13, 2011 

Mr. WOMACK (for himself, Ms. SPEIER, Mr. POE of Texas, Mr. DIAZ-BALART, 

Mr. ROSS of Florida, Mrs. MALONEY, Mr. WELCH, Ms. MCCOLLUM, Mr. 

DUNCAN of Tennessee, and Mr. MILLER of North Carolina) introduced 

the following bill; which was referred to the Committee on the Judiciary 

A BILL 

To improve the States’ rights to enforce the collection of 

State 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 Equity 

5 Act of 2011’’. 

6 SEC. 2. AUTHORIZATION FOR STATES TO REQUIRE COLLEC7 TION OF SALES AND USE TAXES. 

8 (a) GRANT OF AUTHORITY.—Notwithstanding any 

9 other provision of law, a State electing, individually or 


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1 through an agreement with one or more of the several 

2 States, to satisfy the requirements of subsection (b) is au3 thorized to require all sellers not qualifying for the small 

4 seller exception to collect and remit sales and use taxes 

5 with respect to remote sales into the State without regard 

6 to the location of the seller. 

7 (b) REQUIREMENTS FOR AUTHORITY.—The author8 ization provided under paragraph (1) shall be granted 

9 once the State implements a simplified system for admin10 istration of sales and use tax collection with respect to 

11 remote sellers, which includes the following minimum re12 quirements: 

13 (1) SMALL SELLER EXCEPTION.—An exception 

14 for remote sellers with gross annual receipts in the 

15 preceding calendar year from remote sales of items, 

16 services, and other products in the United States not 

17 exceeding $1,000,000 (or such greater amount as 

18 determined by the State involved) or in the State not 

19 exceeding $100,000 (or such greater amount as de20 termined by the State). 

21 (2) FORM AND FILING.—A sales and use tax re22 turn for use by remote sellers and a single revenue 

23 authority within the State with which remote sellers 

24 are required to file the return. A State may not re25 quire that remote sellers submit any other sales and 


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1 use tax return other than the sales and use tax re2 turn applicable to remote sellers. A remote seller 

3 may not be required to file sales and use tax returns 

4 any more frequently than returns are required for 

5 other sellers. No local jurisdiction may require a re6 mote seller to submit a sales and use tax return or 

7 to collect sales and use tax other than as provided 

8 by this paragraph. 

9 (3) DEFINITION OF TAX BASE.—With respect 

10 to remote sellers— 

11 (A) products and services subject to tax 

12 must be identical throughout the State, and 

13 (B) any exemptions must be identical 

14 throughout the State and may not include ex15 emptions for products and services that are not 

16 exempt when sold by other than remote sellers. 

17 (4) SALES AND USE TAX RATE STRUCTURE.— 

18 (A) Except as provided in subparagraph 

19 (B) of this paragraph, remote sellers must col20 lect sales and use tax under one of three rate 

21 structures— 

22 (i) a single State-wide blended rate 

23 that includes both the State rate and ap24 plicable rates of local jurisdictions, as de25 termined by the State; 


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1 (ii) the maximum State rate, which is 

2 the highest rate at which sellers are re3 quired by the State to collect tax, exclusive 

4 of tax imposed by or for the specific ben5 efit of local jurisdictions; or 

6 (iii) the applicable destination rate, 

7 which is the sum of the State rate and any 

8 applicable rate for the local jurisdiction 

9 into which the sale was made. If a State 

10 requires that remote sellers collect at the 

11 applicable destination rate, the State must 

12 make available adequate software to re13 mote sellers that substantially eases the 

14 burden of collecting at multiple rates with15 in the State, and any State providing such 

16 software must relieve remote sellers from 

17 liability to that State for collection of the 

18 incorrect amount of sales or use tax, in19 cluding any penalties or interest, provided 

20 that collection of the improper amount is 

21 the result of relying on information pro22 vided by that State. 

23 (B) A State that generally imposes a lower 

24 sales and use tax rate for sales of food or drugs 


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1 and medicine, or both, may require remote sell2 ers to collect sales and use tax at such rates. 

3 (C) The rates described in clause (i) and 

4 (ii) must not exceed the respective average 

5 State and locality rates applicable to sellers 

6 other than remote sellers. 

7 (c) COMMENCEMENT OF AUTHORITY.— 

8 (1) IN GENERAL.—A State satisfying the re9 quirements of subsection (b) may exercise the au10 thority granted in subsection (a) beginning on the 

11 first day of the calendar quarter at least six months 

12 after the date that the State publishes the public no13 tice described in paragraph (2). 

14 (2) NOTICE REQUIREMENTS.—The public notice 

15 required in paragraph (1) must include the following 

16 information for remote sellers: 

17 (A) The title and reference to the legisla18 tion that the State has enacted requiring re19 mote sellers to collect sales and use tax. 

20 (B) The criteria under which remote sell21 ers are required to collect sales and use tax 

22 under the State legislation. 

23 (C) The rate or rates at which affected re24 mote sellers will be required to collect sales and 

25 use tax. 


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1 (D) The date upon which affected remote 

2 sellers will be required to begin collecting sales 

3 and use tax. 

4 (E) References to compliance information 

5 and the form to be filed by remote sellers. 

6 (d) TERMINATION OF AUTHORITY.—The authoriza7 tion provided under subsection (a) shall terminate for a 

8 State that no longer satisfies the requirements of sub9 section (b) on the date that— 

10 (1) a court of competent jurisdiction determines 

11 that the State’s simplified system of administration 

12 no longer meets the minimum requirements set forth 

13 in subsection (b); and 

14 (2) the determination of such court is no longer 

15 subject to appeal. 

16 SEC. 3. PREEMPTION. 

17 Except as otherwise provided in this Act, this Act 

18 shall not be construed to preempt or limit any power exer19 cised or to be exercised by a State or local jurisdiction 

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

21 any other Federal law. 

22 SEC. 4. LIMITATIONS. 

23 (a) IN GENERAL.—Nothing in this Act shall be con24 strued as— 


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1 (1) subjecting a seller to franchise taxes, in2 come taxes, or licensing requirements of a State or 

3 political subdivision thereof; 

4 (2) affecting the application of such taxes or re5 quirements or enlarging or reducing the authority of 

6 any State to impose such taxes or requirements; 

7 (3) requiring any State or any local taxing ju8 risdiction to exempt, or to impose a tax on any prod9 uct, or to adopt any particular type of tax, or to im10 pose the same rate of tax as any other taxing juris11 diction; or 

12 (4) permitting or prohibiting a State from— 

13 (A) licensing or regulating any person; 

14 (B) requiring any person to qualify to 

15 transact intrastate business; 

16 (C) subjecting any person to State taxes 

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

18 (D) exercising authority over matters of 

19 interstate commerce. 

20 (b) NO EFFECT ON NEXUS.—No obligation imposed 

21 by virtue of the authority granted by section 2 shall be 

22 considered in determining whether a seller has a nexus 

23 with any State for any other tax purpose. 


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1 SEC. 5. DEFINITIONS. 

2 For purposes of this Act, the following definitions 

3 shall apply: 

4 (1) STATE.—The term ‘‘State’’ means each of 

5 the several States, the District of Columbia, the 

6 Commonwealth of Puerto Rico, Guam, American 

7 Samoa, the United States Virgin Islands, the Com8 monwealth of the Northern Mariana Islands, any 

9 other territory or possession of the United States, 

10 and any Indian country as defined in section 1151 

11 of title 18 of the United States Code. 

12 (2) LOCAL JURISDICTION.—The term ‘‘local ju13 risdiction’’ means any political subdivision of a 

14 State. 

15 (3) PERSON.—The term ‘‘person’’ means an in16 dividual, trust, estate, fiduciary, partnership, cor17 poration, limited liability company, or any other 

18 legal entity, and includes a State or local govern19 ment. 

20 (4) SALE INTO THE STATE.—The term ‘‘sale 

21 into the State’’ means a sale where the item sold is 

22 received by the purchaser in the State, based on the 

23 location indicated by instructions for delivery that 

24 the purchaser furnishes to the seller. When no deliv25 ery location is specified, the sale occurs in the State 

26 if the customer’s billing address is in the State. 


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

2 means a sale of goods or services attributed to a 

3 State with respect to which a seller does not have 

4 adequate physical presence to establish nexus under 

5 the law existing on the day before the date of the 

6 enactment of this Act so as to allow such State to 

7 require, without regard to the authority granted by 

8 this Act, the seller to collect and remit taxes covered 

9 by this Act with respect to such sale. 

10 (6) REMOTE SELLER.—The term ‘‘remote sell11 er’’ means a person that makes remote sales. 

12 (7) SALES TAX.—The term ‘‘sales tax’’ means 

13 a tax that is— 

14 (A) imposed on or incident to the sale of 

15 tangible or intangible personal property or serv16 ices as may be defined or specified under the 

17 laws imposing such tax; and 

18 (B) measured by the amount of the sales 

19 price, cost, charge, or other value of or for such 

20 property or services. 

21 (8) USE TAX.—The term ‘‘use tax’’ means a 

22 tax that is— 

23 (A) imposed on the purchase, storage, con24 sumption, distribution, or other use of tangible 

25 or intangible personal property or services as 


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1 may be defined or specified under the laws im2 posing such tax; and 

3 (B) measured by the purchase price of 

4 such property or services. 

5 SEC. 6. SEVERABILITY. 

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

7 provision to any person or circumstance is held to be un8 constitutional, the remainder of this Act and the applica9 tion of the provisions of such to any person or cir10 cumstance shall not be affected thereby. 

Æ 


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