(V) respond to sales and use tax 
audit requests by States for remote 
sellers; and 
(VI) provide safeguards and pro-
tection of consumer privacy in any 
data stored by the certified software 
provider; and 
(iv) certification procedures for per-
sons to be approved as certified software 
providers. 
Such free access shall include installation, setup 
and maintenance of the automated system into 
the remote seller’s system. For purposes of 
clause (iii), the software provided by national 
certified software providers shall be capable of 
calculating and filing sales and use taxes in all 
States qualified under this Act. 
(E) Relieve remote sellers from liability to 
the State or locality for the incorrect collection, 
remittance, or noncollection of sales and use 
taxes, including any penalties or interest, if the 
liability is the result of an error or omission 
made by a certified software provider unless the 
error or omission is the result of misleading, in-
complete, or inaccurate information provided to 
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the certified software provider by the remote 
seller. 
(F) Relieve certified software providers 
from liability to the State or locality for the in-
correct collection, remittance, or noncollection 
of sales and use taxes, including any penalties 
or interest, if the liability is the result of mis-
leading, incomplete, or inaccurate information 
provided by a remote seller. 
(G) Relieve remote sellers and certified 
software providers from liability to the State or 
locality for incorrect collection, remittance, or 
noncollection of sales and use taxes, including 
any penalties or interest, if the liability is the 
result of incorrect information or software pro-
vided or certified by the State. 
(H) Provide remote sellers and certified 
software providers with 90-days notice of rate 
and boundary changes and any changes to the 
products and services specified under paragraph 
(1)(B) by the State or any locality in the State 
and update the information described in clauses 
(i) and (ii) of subparagraph (D) accordingly 
and relieve any remote seller or certified soft-
ware provider from liability for collecting sales 
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and use taxes at the immediately preceding ef-
fective rate during the 90-day notice period if 
the required notice is not provided. 
(I) Provide the following, but only if the 
law of a State allows a person, other than the 
State itself, to pursue a cause of action against 
a seller for under-collected or over-collected 
sales or use tax: 
(i) That a person, other than the 
State itself, may not pursue any cause of 
action against a remote seller for under- 
collected or over-collected sales or use tax 
unless the remote seller has received writ-
ten notice from the person that the remote 
seller has over-collected or under-collected 
sales and use tax, the notice contains in-
formation sufficient to determine the valid-
ity of the refund request or asserted 
under-collection, and the remote seller has 
not, within 60 days of receipt of the notice, 
refunded affected customers the amount of 
the over-collected sales and use tax or paid 
the under-collected amount of sales and 
use tax to the State. No penalties may be 
imposed during the 60-day period in excess 
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of the penalties that would otherwise be 
imposed by the State had no notice been 
provided pursuant to this paragraph. 
(ii) That a notice of over-collection 
from a person is only valid if received with-
in the applicable statute of limitations for 
filing refunds for sales and use tax, and 
that a notice of under-collection from a 
person is only valid if received within the 
applicable statute of limitations for assess-
ing underpayments of sales and use tax. 
(iii) That a person, other than the 
State itself, may not pursue any cause of 
action against a certified software provider 
for its activities conducted for a remote 
seller described in clause (i) unless the re-
mote seller provides a copy of the written 
notice to the certified software provider 
within a reasonable time for the certified 
software provider to be able to assist the 
remote seller in making the payments with-
in the timeframe described in clause (i). 
(iv) That a person, other than the 
State itself, may pursue a cause of action 
against a remote seller for under-collected 
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or over-collected sales or use tax if the re-
mote seller knew or should have known 
that it had under-collected or over-collected 
and did not, within 60 days of its deter-
mination, refund affected customers the 
amount of the over-collected sales and use 
tax or pay the amount of under-collected 
sales and use tax to the State. 
(J) Accepts registrations at no charge to 
certified software provider or remote seller from 
a central online registration system that allows 
a remote seller to register to collect and remit 
sales and use taxes in all States that have exer-
cised authority under this Act. 
(K) Relieve remote sellers and certified 
software providers, except in cases of fraud, 
from liability for tax, penalty, and interest on 
transactions if the purchaser provides to the re-
mote seller the necessary documentation to 
claim an exemption within 90 days of the sale. 
(c) SMALL REMOTE SELLER PHASE-IN.— 
(1) COLLECTION AUTHORIZED.—A State is au-
thorized to require the collection of sales and use 
taxes by a remote seller under this Act only as fol-
lows: 
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(A) For the 1st calendar year following the 
effective date, if the remote seller— 
(i) has gross annual receipts exceed-
ing $10,000,000 in the calendar year pre-
ceding the date of enactment; or 
(ii) utilizes an electronic marketplace 
for the purpose of making products or 
services available for sale to the public. 
(B) For the 2d calendar year following the 
effective date, if the remote seller— 
(i) has gross annual receipts exceed-
ing $5,000,000 in the immediately pre-
ceding calendar year; or 
(ii) utilizes an electronic marketplace 
for the purpose of making products or 
services available for sale to the public. 
(C) For the 3d calendar year following the 
effective date, if the remote seller— 
(i) has gross annual receipts exceed-
ing $1,000,000 in the immediately pre-
ceding calendar year; or 
(ii) utilizes an electronic marketplace 
for the purpose of making products or 
services available for sale to the public. 
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(2) DETERMINATION
OF
THRESHOLD.—For 
purposes of determining whether the threshold in 
this paragraph (1) is met— 
(A) the sales of all persons related within 
the meaning of subsections (b) and (c) of sec-
tion 267, or section 707(b)(1), of the Internal 
Revenue Code of 1986 shall be aggregated; or 
(B) persons with one or more ownership 
relationships shall also be aggregated if such re-
lationships were designed with a principal pur-
pose of avoiding the application of these rules. 
SEC. 3. LIMITATIONS. 
(a) IN GENERAL.—Nothing in this Act shall be con-
strued as— 
(1) subjecting a remote seller or any other per-
son to franchise, income, occupation, or any other 
type of taxes, other than sales and use taxes; 
(2) affecting the application of such taxes; or 
(3) enlarging or reducing State authority to im-
pose such taxes. 
(b) NO EFFECT ON NEXUS.—This Act shall not be 
construed to create any nexus between a person and a 
State or locality. 
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(c) LICENSING AND REGULATORY REQUIREMENTS.— 
Nothing in this Act shall be construed as permitting or 
prohibiting a State from— 
(1) licensing or regulating any person; 
(2) requiring any person to qualify to transact 
intrastate business; 
(3) subjecting any person to State or local taxes 
not related to the sale of goods or services; or 
(4) exercising authority over matters of inter-
state commerce. 
(d) NO NEW TAXES.—Nothing in this Act shall be 
construed as encouraging a State to impose sales and use 
taxes on any goods or services not subject to a sales and 
use tax prior to the date of the enactment of this Act. 
(e) NO EFFECT ON INTRASTATE SALES.—The provi-
sions of this Act shall apply only to remote sales and shall 
not apply to intrastate sales or intrastate sourcing rules. 
States granted authority under section 2(a) shall comply 
with all intrastate provisions of the Streamlined Sales and 
Use Tax Agreement. 
(f) NO EFFECT ON MOBILE TELECOMMUNICATIONS 
SOURCING ACT.—Nothing in this Act shall be construed 
as altering in any manner or preempting the Mobile Tele-
communications Sourcing Act (4 U.S.C. 116–126). 
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(g) CERTIFICATION REQUIREMENTS.—A State may 
not exercise authority under this Act unless the following 
requirements are satisfied: 
(1) The State provides certification procedures 
for persons to be approved as certified software pro-
viders. A State may delegate the certification proce-
dures so long as the State retains final approval over 
any certification decisions. 
(2) The State (or its delegate) does not deny or 
revoke certification to a software provider without a 
reasonable basis, or arbitrarily or capriciously. A 
State must complete the certification review of the 
software provider no later than the first day of the 
calendar quarter that is at least 180 days after the 
software provider requests certification by that 
State. 
(3) The State has certified multiple national 
certified software providers, and the certifications 
are in effect. Nothing in this Act shall be construed 
to deny the ability of a remote seller to deploy and 
utilize a certified software provider of the seller’s 
choice. 
(4) The State provides compensation for cer-
tified software providers. A State may delegate the 
authority to negotiate the compensation so long as 
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the State retains final approval of the compensation 
rate(s). 
(h) LIMITATION ON INITIAL COLLECTION OF SALES 
AND USE TAXES FROM REMOTE SALES.—A State may 
not begin to exercise the authority under this title— 
(1) before the date that is 1 year after the date 
of the enactment of this Act; and 
(2) during the period beginning October 1 and 
ending on December 31 of the first calendar year 
beginning after the date of the enactment of this 
Act. 
(i) LIMITATION ON AUDITS OF REMOTE SELLERS.— 
A State exercising authority under this Act— 
(1) may not audit a remote seller that— 
(A) has registered in the State under sec-
tion 2(b)(2)(J); and 
(B) has gross annual receipts of less than 
$5,000,000 in the taxable year as aggregated in 
subsection (c) of section 2, 
unless there is reasonable suspicion that such remote 
seller has engaged in intentional misrepresentation 
or fraud; and 
(2) may not have audits of remote sellers con-
ducted by persons whose compensation is contingent 
upon audit findings. 
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(j) LIMITATION ON TIME PERIOD TO ASSESS RE-
MOTE
SELLERS
AND
CERTIFIED
SOFTWARE
PRO-
VIDERS.—A State may not hold a remote seller or certified 
software provider liable for the incorrect collection, remit-
tance, or noncollection of sales and use taxes, including 
any penalties or interest, if the liability is for a sales or 
use tax assessed under the authority of this Act more than 
3 years after the later of the due date or the filing of 
the sales and use tax return applicable to the sales and 
use tax assessed. 
(k) REMOTE
SELLER
COMPENSATION.—A State 
must provide remote sellers with compensation equaling 
no less than the amount, if any, the State provides to non-
remote sellers within the State. 
SEC. 4. DEFINITIONS AND SPECIAL RULES. 
In this Act: 
(1) CERTIFIED
SOFTWARE
PROVIDER.—The 
term ‘‘certified software provider’’ means a person 
that— 
(A) provides software or access to software 
to remote sellers to facilitate State and local 
sales and use tax compliance; and 
(B) is certified by a State or on a State’s 
behalf to so provide such software. 
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(2) EFFECTIVE
DATE.—The term ‘‘effective 
date’’ means the date that is 1 year after the date 
of the enactment of this Act. However, if the date 
that is 1 year after the date of the enactment of this 
Act falls during the period beginning October 1 and 
ending on December 31, the effective date shall be 
January 1 of the immediately following year. 
(3) ELECTRONIC
MARKETPLACE.—The term 
‘‘electronic marketplace’’ means a digital marketing 
platform where— 
(A) products or services are offered for 
sale by more than 1 remote seller; and 
(B) buyers may purchase such products or 
services through a common system of financial 
transaction processing. 
(4) LOCALITY; LOCAL.—The terms ‘‘locality’’ 
and ‘‘local’’ refer to any political subdivision of a 
State. 
(5) MEMBER
STATE.—The term ‘‘Member 
State’’— 
(A) means a Member State as that term is 
used under the Streamlined Sales and Use Tax 
Agreement as in effect on the date of the enact-
ment of this Act; and 
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(B) does not include any associate member 
or a member that is not a full member under 
the Streamlined Sales and Use Tax Agreement. 
(6) NATIONAL
CERTIFIED
SOFTWARE
PRO-
VIDER.—The term ‘‘national certified software pro-
vider’’ means a certified software provider that has 
been certified by all States that are certifying 
States. A ‘‘certifying State’’ is a State that has a 
generally applicable sales and use tax, that has met 
the requirements set forth under section 3(g)(1), 
and that has not violated the requirements set forth 
in section 3(g)(2). Once a certified software provider 
is a national certified software provider, it shall not 
lose its status as such when a State becomes a certi-
fying State so long as the national certified software 
provider requested certification from the new certi-
fying State within 30 days from the date that the 
State became a certifying State and the certifying 
State has not violated section 3(g)(2). 
(7) PERSON.—The term ‘‘person’’ means an in-
dividual, trust, estate, fiduciary, partnership, cor-
poration, limited liability company, or other legal en-
tity, and a State or local government. 
(8) REMOTE SALE.—The term ‘‘remote sale’’ 
means a sale that originates in one State and is 
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sourced to another State as provided in section 
4(10) which the seller would not legally be required 
to pay, collect, or remit State or local sales and use 
taxes without the authority provided by this Act. 
(9) REMOTE SELLER.—The term ‘‘remote sell-
er’’ means a person that makes remote sales in the 
State without a physical presence. For purposes of 
this paragraph, a person has a physical presence in 
a State only if such person’s business activities in 
the State include any of the following during such 
person’s taxable year: 
(A) Being an individual physically in the 
State, or assigning one or more employees to be 
in the State. 
(B) Using the services of an agent (exclud-
ing an employee) to establish or maintain the 
market in the State, if such agent does not per-
form business services in the State for any 
other person during such taxable year. 
(C) The leasing or owning of tangible per-
sonal property or of real property in the State. 
For purposes of this paragraph, the term ‘‘physical 
presence’ ’’ shall not include presence in a State for 
less than 15 days in a taxable year (or a greater 
number of days if provided by State law), or pres-
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ence in a State to conduct limited or transient busi-
ness activity. 
(10) SOURCED.—For purposes of a State 
granted authority under section 2(b), the location to 
which a remote sale is sourced refers to the location 
where the product or service sold is received by the 
purchaser, based on the location indicated by in-
structions for delivery that the purchaser furnishes 
to the seller. When no delivery location is specified, 
the remote sale is sourced to the customer’s address, 
including the customer’s place of primary use that 
is either known to the seller or, if not known, ob-
tained by the seller during the consummation of the 
transaction, including the address of the customer’s 
payment instrument if no other address is available. 
If an address or place of primary use is unknown 
and a billing address cannot be obtained, the remote 
sale is sourced to the address of the seller from 
which the remote sale was made. The term ‘‘re-
ceived’’ means taking possession of product or mak-
ing first use of services. A State granted authority 
under section 2(a) shall comply with the sourcing 
provisions of the Streamlined Sales and Use Tax 
Agreement. 
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(11) STATE.—The term ‘‘State’’ means any of 
the several States, the District of Columbia, the 
Commonwealth of Puerto Rico, Guam, American 
Samoa, the United States Virgin Islands, the Com-
monwealth of the Northern Mariana Islands, or any 
territory or possession of the United States. 
(12) STREAMLINED
SALES
AND
USE
TAX 
AGREEMENT.—The term ‘‘Streamlined Sales and 
Use Tax Agreement’’ means the multistate agree-
ment with that title adopted on November 12, 2002, 
as in effect on the date of the enactment of this Act 
and as further amended from time to time. 
SEC. 5. SEVERABILITY. 
If any provision of this Act, or the application of such 
provision to any person or circumstance, is held to be un-
constitutional, then the remainder of this Act, and the ap-
plication of the provisions of such to any person or cir-
cumstance, shall not be affected thereby. 
Æ 
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