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. 
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 ‘‘Marketplace Equity 
Act of 2011’’. 
SEC. 2. AUTHORIZATION FOR STATES TO REQUIRE COLLEC-
TION OF SALES AND USE TAXES. 
(a) GRANT OF AUTHORITY.—Notwithstanding any 
other provision of law, a State electing, individually or 
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through an agreement with one or more of the several 
States, to satisfy the requirements of subsection (b) is au-
thorized to require all sellers not qualifying for the small 
seller exception to collect and remit sales and use taxes 
with respect to remote sales into the State without regard 
to the location of the seller. 
(b) REQUIREMENTS FOR AUTHORITY.—The author-
ization provided under paragraph (1) shall be granted 
once the State implements a simplified system for admin-
istration of sales and use tax collection with respect to 
remote sellers, which includes the following minimum re-
quirements: 
(1) SMALL SELLER EXCEPTION.—An exception 
for remote sellers with gross annual receipts in the 
preceding calendar year from remote sales of items, 
services, and other products in the United States not 
exceeding $1,000,000 (or such greater amount as 
determined by the State involved) or in the State not 
exceeding $100,000 (or such greater amount as de-
termined by the State). 
(2) FORM AND FILING.—A sales and use tax re-
turn for use by remote sellers and a single revenue 
authority within the State with which remote sellers 
are required to file the return. A State may not re-
quire that remote sellers submit any other sales and 
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use tax return other than the sales and use tax re-
turn applicable to remote sellers. A remote seller 
may not be required to file sales and use tax returns 
any more frequently than returns are required for 
other sellers. No local jurisdiction may require a re-
mote seller to submit a sales and use tax return or 
to collect sales and use tax other than as provided 
by this paragraph. 
(3) DEFINITION OF TAX BASE.—With respect 
to remote sellers— 
(A) products and services subject to tax 
must be identical throughout the State, and 
(B) any exemptions must be identical 
throughout the State and may not include ex-
emptions for products and services that are not 
exempt when sold by other than remote sellers. 
(4) SALES AND USE TAX RATE STRUCTURE.— 
(A) Except as provided in subparagraph 
(B) of this paragraph, remote sellers must col-
lect sales and use tax under one of three rate 
structures— 
(i) a single State-wide blended rate 
that includes both the State rate and ap-
plicable rates of local jurisdictions, as de-
termined by the State; 
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(ii) the maximum State rate, which is 
the highest rate at which sellers are re-
quired by the State to collect tax, exclusive 
of tax imposed by or for the specific ben-
efit of local jurisdictions; or 
(iii) the applicable destination rate, 
which is the sum of the State rate and any 
applicable rate for the local jurisdiction 
into which the sale was made. If a State 
requires that remote sellers collect at the 
applicable destination rate, the State must 
make available adequate software to re-
mote sellers that substantially eases the 
burden of collecting at multiple rates with-
in the State, and any State providing such 
software must relieve remote sellers from 
liability to that State for collection of the 
incorrect amount of sales or use tax, in-
cluding any penalties or interest, provided 
that collection of the improper amount is 
the result of relying on information pro-
vided by that State. 
(B) A State that generally imposes a lower 
sales and use tax rate for sales of food or drugs 
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and medicine, or both, may require remote sell-
ers to collect sales and use tax at such rates. 
(C) The rates described in clause (i) and 
(ii) must not exceed the respective average 
State and locality rates applicable to sellers 
other than remote sellers. 
(c) COMMENCEMENT OF AUTHORITY.— 
(1) IN GENERAL.—A State satisfying the re-
quirements of subsection (b) may exercise the au-
thority granted in subsection (a) beginning on the 
first day of the calendar quarter at least six months 
after the date that the State publishes the public no-
tice described in paragraph (2). 
(2) NOTICE REQUIREMENTS.—The public notice 
required in paragraph (1) must include the following 
information for remote sellers: 
(A) The title and reference to the legisla-
tion that the State has enacted requiring re-
mote sellers to collect sales and use tax. 
(B) The criteria under which remote sell-
ers are required to collect sales and use tax 
under the State legislation. 
(C) The rate or rates at which affected re-
mote sellers will be required to collect sales and 
use tax. 
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(D) The date upon which affected remote 
sellers will be required to begin collecting sales 
and use tax. 
(E) References to compliance information 
and the form to be filed by remote sellers. 
(d) TERMINATION OF AUTHORITY.—The authoriza-
tion provided under subsection (a) shall terminate for a 
State that no longer satisfies the requirements of sub-
section (b) on the date that— 
(1) a court of competent jurisdiction determines 
that the State’s simplified system of administration 
no longer meets the minimum requirements set forth 
in subsection (b); and 
(2) the determination of such court is no longer 
subject to appeal. 
SEC. 3. PREEMPTION. 
Except as otherwise provided in this Act, this Act 
shall not be construed to preempt or limit any power exer-
cised or to be exercised by a State or local jurisdiction 
under the law of such State or local jurisdiction or under 
any other Federal law. 
SEC. 4. LIMITATIONS. 
(a) IN GENERAL.—Nothing in this Act shall be con-
strued as— 
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(1) subjecting a seller to franchise taxes, in-
come taxes, or licensing requirements of a State or 
political subdivision thereof; 
(2) affecting the application of such taxes or re-
quirements or enlarging or reducing the authority of 
any State to impose such taxes or requirements; 
(3) requiring any State or any local taxing ju-
risdiction to exempt, or to impose a tax on any prod-
uct, or to adopt any particular type of tax, or to im-
pose the same rate of tax as any other taxing juris-
diction; or 
(4) permitting or prohibiting a State from— 
(A) licensing or regulating any person; 
(B) requiring any person to qualify to 
transact intrastate business; 
(C) subjecting any person to State taxes 
not related to the sale of goods or services; or 
(D) exercising authority over matters of 
interstate commerce. 
(b) NO EFFECT ON NEXUS.—No obligation imposed 
by virtue of the authority granted by section 2 shall be 
considered in determining whether a seller has a nexus 
with any State for any other tax purpose. 
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SEC. 5. DEFINITIONS. 
For purposes of this Act, the following definitions 
shall apply: 
(1) STATE.—The term ‘‘State’’ means each 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, any 
other territory or possession of the United States, 
and any Indian country as defined in section 1151 
of title 18 of the United States Code. 
(2) LOCAL JURISDICTION.—The term ‘‘local ju-
risdiction’’ means any political subdivision of a 
State. 
(3) PERSON.—The term ‘‘person’’ means an in-
dividual, trust, estate, fiduciary, partnership, cor-
poration, limited liability company, or any other 
legal entity, and includes a State or local govern-
ment. 
(4) SALE INTO THE STATE.—The term ‘‘sale 
into the State’’ means a sale where the item sold is 
received by the purchaser in the State, based on the 
location indicated by instructions for delivery that 
the purchaser furnishes to the seller. When no deliv-
ery location is specified, the sale occurs in the State 
if the customer’s billing address is in the State. 
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(5) REMOTE SALE.—The term ‘‘remote sale’’ 
means a sale of goods or services attributed to a 
State with respect to which a seller does not have 
adequate physical presence to establish nexus under 
the law existing on the day before the date of the 
enactment of this Act so as to allow such State to 
require, without regard to the authority granted by 
this Act, the seller to collect and remit taxes covered 
by this Act with respect to such sale. 
(6) REMOTE SELLER.—The term ‘‘remote sell-
er’’ means a person that makes remote sales. 
(7) SALES TAX.—The term ‘‘sales tax’’ means 
a tax that is— 
(A) imposed on or incident to the sale of 
tangible or intangible personal property or serv-
ices as may be defined or specified under the 
laws imposing such tax; and 
(B) measured by the amount of the sales 
price, cost, charge, or other value of or for such 
property or services. 
(8) USE TAX.—The term ‘‘use tax’’ means a 
tax that is— 
(A) imposed on the purchase, storage, con-
sumption, distribution, or other use of tangible 
or intangible personal property or services as 
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may be defined or specified under the laws im-
posing such tax; and 
(B) measured by the purchase price of 
such property or services. 
SEC. 6. SEVERABILITY. 
If any provision of this Act or the application of such 
provision to any person or circumstance is held to be un-
constitutional, the remainder of this Act and the applica-
tion of the provisions of such to any person or cir-
cumstance shall not be affected thereby. 
Æ 
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