I
107TH CONGRESS
1ST SESSION
H. R. 3398
To provide Federal reimbursement to State and local governments for a
30-day sales, use, and retailers’ occupation tax holiday.
IN THE HOUSE OF REPRESENTATIVES
DECEMBER 4, 2001
Mr. ISRAEL introduced the following bill; which was referred to the Committee
on Ways and Means
A BILL
To provide Federal reimbursement to State and local govern-
ments for a 30-day sales, use, and retailers’ occupation
tax holiday.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Consumer and Retail
Sales Stimulus Act of 2001’’.
SEC. 2. STATE AND LOCAL SALES TAX RELIEF FOR CON-
SUMERS.
(a) IN GENERAL.—The Secretary shall reimburse
each State for the amount of State and local sales tax
payable and not collected during the sales tax holiday pe-
riod.
(b) DETERMINATION AND TIMING OF REIMBURSE-
MENT.—
(1) PREDETERMINED AMOUNT.—Not later than
30 days after the expiration of the sales tax holiday
period, the Secretary shall pay to each State an
amount equal to the sum of—
(A)(i) the amount of State and local sales
tax payable and collected in such State during
the same period in 2000 as the sales tax holi-
day period, times
(ii) an acceleration factor equal to 1.73,
plus
(B) an amount equal to 1 percent of the
amount determined under subparagraph (A) for
State administrative costs.
(2) RECONCILIATION AMOUNT.—Not later than
60 days after the expiration of the sales tax holiday
period, the Secretary shall pay to each electing State
under subsection (c)(2) an amount equal to the ex-
cess (if any) of—
(A) the amount of State and local sales tax
payable and not collected in such State during
the sales tax holiday period, over
(B) the amount determined under para-
graph (1)(A) and paid to such State.
(c) REQUIREMENT FOR REIMBURSEMENT.—The Sec-
retary may not pay a reimbursement under this section
unless—
(1) the chief executive officer of the State in-
forms the Secretary, not later than 10 days after the
date of the enactment of this Act, of the intention
of the State to qualify for such reimbursement by
not collecting sales tax payable during the sales tax
holiday period,
(2) in the case of a State which elects to receive
the reimbursement of a reconciliation amount under
subsection (b)(2)—
(A) the chief executive officer of the State
informs the Secretary and the Director of Man-
agement and Budget and the retail sellers of
tangible property in such State, not later than
10 days after the date of the enactment of this
Act, of the intention of the State to make such
an election,
(B) the chief executive officer of the State
informs the retail sellers of tangible property in
such State, not later than 10 days after the
date of the enactment of this Act, of the inten-
tion of the State to make such an election and
the additional information (if any) that will be
required as an addendum to the standard re-
ports required of such retail sellers with respect
to the reporting periods including the sales tax
holiday period,
(C) the chief executive officer reports to
the Secretary and the Director of Management
and Budget, not later than 45 days after the
expiration of the sales tax holiday period, the
amount determined under subsection (b)(2) in a
manner specified by the Secretary,
(D) if amount determined under subsection
(b)(1)(A) and paid to such State exceeds the
amount determined under subsection (b)(2)(A),
the chief executive officer agrees to remit to the
Secretary such excess not later than 60 days
after the expiration of the sales tax holiday pe-
riod, and
(E) the chief executive officer of the State
certifies that such State—
(i) in the case of any retail seller un-
able to identify and report sales which
would otherwise be taxable during the sales
tax holiday period, shall treat the reporting
by such seller of sales revenue during such
period, multiplied by the ratio of taxable
sales to total sales for the same period in
2000 as the sales tax holiday period, as a
good faith effort to comply with the re-
quirements under subparagraph (B), and
(ii) shall not treat any such retail sell-
er of tangible property who has made such
a good faith effort liable for any error
made as a result of such effort to comply
unless it is shown that the retailer acted
recklessly or fraudulently,
(3) in the case of any home rule State, the chief
executive officer of such State certifies that all local
governments that impose sales taxes in such State
agree to provide a sales tax holiday during the sales
tax holiday period,
(4) the chief executive officer of the State
agrees to pay each local government’s share of the
reimbursement (as determined under subsection (d))
not later than 20 days after receipt of such reim-
bursement, and
(5) in the case of not more than 20 percent of
the States which elect to receive the reimbursement
of a reconciliation amount under subsection (b)(2),
the Director of Management and Budget certifies
the amount of the reimbursement required under
subsection (b)(2) based on the reports by the chief
executive officers of such States under paragraph
(2)(C).
(d) DETERMINATION OF REIMBURSEMENT OF LOCAL
SALES TAXES.—For purposes of subsection (c)(4), a local
government’s share of the reimbursement to a State under
this section shall be based on the ratio of the local sales
tax to the State sales tax for such State for the same time
period taken into account in determining such reimburse-
ment, based on data published by the Bureau of the Cen-
sus.
(e) DEFINITIONS.—For purposes of this section—
(1) HOME RULE STATE.—The term ‘‘home rule
State’’ means a State that does not control imposi-
tion and administration of local taxes.
(2) LOCAL.—The term ‘‘local’’ means a city,
county, or other subordinate revenue or taxing au-
thority within a State.
(3) 
SALES
TAX.—The 
term 
‘‘sales 
tax’’
means—
(A) a tax imposed on or measured by gen-
eral retail sales of taxable tangible property, or
services performed incidental to the sale of tax-
able tangible property, that is—
(i) calculated as a percentage of the
price, gross receipts, or gross proceeds,
and
(ii) can or is required to be directly
collected by retail sellers from purchasers
of such property,
(B) a use tax, or
(C) the Illinois Retailers’ Occupation Tax,
as defined under the law of the State of Illinois,
but excludes any tax payable with respect to food
and beverages sold for immediate consumption on
the premises, beverages containing alcohol, and to-
bacco products.
(4) SALES TAX HOLIDAY PERIOD.—The term
‘‘sales tax holiday period’’ means the 30-day period
beginning on the 21st day occurring after the date
of the enactment of this Act.
(5) SECRETARY.—The term ‘‘Secretary’’ means
the Secretary of the Treasury.
(6) STATE.—The term ‘‘State’’ means any of
the several States, the District of Columbia, or the
Commonwealth of Puerto Rico.
(7) USE TAX.—The term ‘‘use tax’’ means a
tax imposed on the storage, use, or other consump-
tion of tangible property that is not subject to sales
tax.
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