I 
108TH CONGRESS 
1ST SESSION H. R. 3184
To promote simplification and fairness in the administration and collection 
of sales and use taxes. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 25, 2003
Mr. ISTOOK (for himself, Mr. DELAHUNT, Mr. BACHUS, Mr. BALLANCE, Mr. 
BOOZMAN, Mr. CAPUANO, Mr. CONYERS, Mr. FRANK of Massachusetts, 
Mr. ISAKSON, Mr. LAHOOD, and Mr. STENHOLM) introduced the fol-
lowing bill; which was referred to the Committee on the Judiciary 
A BILL 
To promote simplification and fairness in the administration 
and collection of sales and use taxes.
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 ‘‘Streamlined Sales and 
Use Tax Act’’. 
SEC. 2. CONSENT OF CONGRESS. 
The Congress consents to the November 12, 2002, 
Streamlined Sales and Use Tax Agreement.
SEC. 3. SENSE OF THE CONGRESS. 
It is the sense of the Congress that the sales and use 
tax system established by the Streamlined Sales and Use 
Tax Agreement, to the extent that it meets the minimum 
simplification requirements of section 6, provides suffi-
cient simplification and uniformity to warrant Federal au-
thorization to States that are parties to the Agreement 
to require remote sellers, subject to the conditions pro-
vided in this Act, to collect and remit the sales and use 
taxes of such States and of local taxing jurisdictions of 
such States. The purpose of this Act is to effectuate that 
limited authority, and not to grant additional authority 
unrelated to the accomplishment of that purpose. 
SEC. 4. AUTHORIZATION TO REQUIRE COLLECTION OF 
SALES AND USE TAXES. 
(a) GRANT OF AUTHORITY.—Once 10 States com-
prising at least 20 percent of the total population of all 
States imposing a sales tax, as determined by the 2000 
Federal census, have petitioned for membership under the 
Streamlined Sales and Use Tax Agreement in the manner 
required by the Agreement, have been found to be in com-
pliance with the Agreement pursuant to the terms of the 
Agreement, have become Member States under the Agree-
ment, and the necessary operational aspects of the Agree-
ment have been implemented, any Member State under 
the Agreement is authorized, notwithstanding any other
provision of law, to require all sellers not qualifying for 
the small business exception provided under subsection (b) 
to collect and remit sales and use taxes with respect to 
remote sales to purchasers located in such State. Such au-
thorization shall terminate for all States if the require-
ments of the preceding sentence cease to be met or if the 
Agreement, as amended, no longer meets the minimum 
simplification requirements of section 6. Such authoriza-
tion shall also terminate for any Member State if such 
Member State no longer complies with the requirements 
for Member State status under the terms of the Agree-
ment. Determinations regarding compliance with the re-
quirements of this subsection shall be made by the Gov-
erning Board (or, prior to the establishment of the Gov-
erning Board, by the States petitioning for membership 
under the Agreement) subject to section 5. 
(b) SMALL BUSINESS EXCEPTION.—No seller shall 
be subject to a requirement of any State to collect and 
remit sales and use taxes with respect to a remote sale 
where the seller and its affiliates collectively had gross re-
mote taxable sales nationwide of less than $5,000,000 in 
the calendar year preceding the date of such sale. No seller 
shall be subject to a requirement of any State to collect 
and remit sales and use taxes with respect to a remote 
sale where the seller and its affiliates collectively meet the
$5,000,000 threshold of this subsection but the seller has 
less than $100,000 in gross remote taxable sales nation-
wide. 
(c) REASONABLE SELLER COMPENSATION.—The au-
thority provided in subsection (a) is conditioned on accept-
ance and implementation by each Member State of a re-
quirement that the State provide reasonable compensation 
for expenses incurred by sellers related to the administra-
tion, collection and remittance of sales and use taxes. Fur-
thermore, the State shall provide compensation that covers 
all tax processing costs of remote sellers. The additional 
compensation provided to remote sellers shall remain in 
effect for a period of 4 years from the date that a State 
is granted the authority under this Act to require remote 
sellers to collect and remit sales taxes with respect to re-
mote purchasers located in such State. 
SEC. 5. DETERMINATION BY GOVERNING BOARD AND JUDI-
CIAL REVIEW OF THAT DETERMINATION. 
(a) PETITION.—Any person who may be affected by 
the Agreement may petition the Governing Board for a 
determination on any issue relating to the implementation 
of the Agreement. 
(b) REVIEW IN COURT OF FEDERAL CLAIMS.—Any 
person who submits a petition under subsection (a) may 
bring an action against the Governing Board in the United
States Court of Federal Claims for judicial review of the 
action of the Governing Board on that petition if—
(1) the petition relates to an issue of whether—
(A) a State has met or continues to meet 
the requirements for Member State status 
under the Agreement; 
(B) the Governing Board has performed a 
nondiscretionary duty of the Governing Board 
under the Agreement; 
(C) the Agreement continues to meet the 
minimum simplification requirements set forth 
in section 6; or 
(D) any other requirement of section 4 has 
been met; and 
(2) the petition is denied by the Governing 
Board in whole or in part with respect to that issue, 
or the Governing Board fails to act on the petition 
with respect to that issue not later than six months 
after the date on which the petition is submitted. 
(c) TIMING OF ACTION FOR REVIEW.—An action for 
review under this section shall be initiated not later than 
60 days after the Governing Board’s denial of the petition, 
or, if the Governing Board failed to act on the petition, 
within 60 days after the end of the six-month period be-
ginning on the day after the date on which the petition 
was submitted. 
(d) STANDARD OF REVIEW.—In any action for review 
under this section, the court shall set aside the actions, 
findings, and conclusions of the Governing Board found 
to be arbitrary, capricious, an abuse of discretion, or oth-
erwise not in accordance with law. 
(e) JURISDICTION.—
(1) GENERALLY.—Chapter 91 of title 28 of the 
United States Code is amended by adding at the end 
thereof: 
‘‘§ 1510. Jurisdiction regarding the streamlined sales 
and use tax agreement 
‘‘The United States Court of Federal Claims shall 
have exclusive jurisdiction over actions for judicial review 
of determinations of the Governing Board of the Stream-
lined Sales and Use Tax Agreement under the terms and 
conditions provided in section 5 of the Simplified Sales 
and Use Tax Act.’’. 
(2) CONFORMING AMENDMENT TO TABLE OF 
SECTIONS.—The table of sections at the beginning 
of chapter 91 of title 28, United States Code, is 
amended by adding at the end the following new 
item:
‘‘1510. Jurisdiction regarding the streamlined sales and use tax agreement.’’.
SEC. 6. MINIMUM SIMPLIFICATION REQUIREMENTS. 
The following criteria are the minimum simplification 
requirements for the Agreement: 
(1) A centralized, one-stop, multistate registra-
tion system that sellers may elect to use to register 
with the Member States; provided the seller may 
also elect to register directly with a Member State; 
and further provided that privacy and confidentiality 
controls shall be placed on the multistate registra-
tion system so that it may not be used for any pur-
pose other than the administration of sales and use 
taxes. 
(2) Uniform definitions of products and prod-
uct-based exemptions from which the Member States 
may choose their individual tax bases; Member 
States may enact other product-based exemptions 
without restriction if the Agreement does not have 
a definition for the product or for a term that in-
cludes the product. 
(3) Uniform rules for sourcing and attributing 
transactions to particular taxing jurisdictions. 
(4) Uniform procedures for the certification of 
service providers and software on which a seller may 
elect to rely in order to determine State sales and 
use tax rates and taxability. 
(5) Uniform rules for bad debts.
(6) Uniform requirements for tax returns and 
remittances. 
(7) Consistent electronic filing and remittance 
methods. 
(8) Single, State-level administration of all 
State and local sales and use taxes, and a single fil-
ing for each State. 
(9) A single sales and use tax rate per taxing 
jurisdiction for items other than those listed in sec-
tion 308 C of the Agreement as adopted on Novem-
ber 12, 2002, except that a State may impose a sec-
ond sales and use tax rate for items satisfying the 
Agreement’s definition for food, food ingredients, or 
drugs. 
(10) A provision that relieves a seller or service 
provider from liability for collection of the incorrect 
amount of sales or use tax, provided such seller has 
relied on information provided by the Member States 
regarding tax rates, boundaries, or taxing jurisdic-
tion assignments. 
(11) Uniform audit procedures for sellers, in-
cluding an option under which a seller may elect, by 
notifying the Governing Board, to be subject to a 
single audit on behalf of all the Member States or 
a single audit on behalf of each Member State.
(12) Reasonable compensation for all sellers 
that administer, collect and remit sales and use tax, 
with requirements for remote seller compensation as 
provided in section 4(d) of this Act. 
(13) Appropriate protections for consumer pri-
vacy. 
(14) Governance procedures and mechanisms to 
ensure timely, consistent, and uniform implementa-
tion and adherence to the principles of the stream-
lined system and the terms of the Agreement. 
(15) The Member States apply the minimum 
simplification requirements under this subsection to 
transaction taxes on communications by January 1, 
2006, except that the requirement for one uniform 
return shall not apply and the requirements for rate 
simplification are modified to require one rate for 
each type of transaction tax per jurisdiction. 
‘‘Transaction tax’’ as used in this provision shall 
have the same meaning as in section 116 of title 4, 
United States Code, except that ‘‘communications 
services’’ shall replace ‘‘mobile telecommunications 
services’’ whenever such term appears. 
(16) Uniform rules for ‘‘sales tax holidays’’ that 
provide alternative mechanisms for remote sellers to 
participate.
(17) Uniform rules and procedures to address 
refunds and credits for sales taxes relating to cus-
tomer returns, restocking fees, discounts and cou-
pons, and rules to address allocations of shipping 
and handling and discounts applied to multiple item 
and multiple seller orders and sourcing rules that 
contain provisions to prevent double taxation in situ-
ations where a foreign country has imposed a trans-
action tax on a digital good or service. 
(18) Each amendment hereafter adopted to the 
Agreement is within the scope of the subject matter 
currently covered by the agreement. 
SEC. 7. LIMITATION. 
(a) IN GENERAL.—Nothing in this Act shall be con-
strued as subjecting sellers to franchise taxes, income 
taxes, or licensing requirements of a State or political sub-
division thereof, nor shall anything in this Act be con-
strued as affecting the application of such taxes or re-
quirements or enlarging or reducing the authority of any 
State to impose such taxes or requirements. 
(b) NO EFFECT ON NEXUS, ETC.—No obligation im-
posed by virtue of the authority granted by section 4 shall 
be considered in determining whether a seller has a nexus 
with any State for any other tax purpose. Except as pro-
vided in subsection (a), and in section 4, nothing in this 
Act permits or prohibits a State’s—
(1) licensing or regulating any person; 
(2) requiring any person to qualify to transact 
intrastate business; 
(3) subjecting any person to State taxes not re-
lated to the sale of goods or services; or 
(4) exercising authority over matters of inter-
state commerce. 
SEC. 8. EXPEDITED JUDICIAL REVIEW. 
(a) THREE-JUDGE DISTRICT COURT HEARING.—
Notwithstanding any other provision of law, any civil ac-
tion challenging the constitutionality, on its face, of this 
Act, or any provision thereof, shall be heard by a district 
court of three judges convened pursuant to the provisions 
of section 2284 of title 28, United States Code. 
(b) APPELLATE
REVIEW.—Notwithstanding any 
other provision of law, an interlocutory or final judgment, 
decree, or order of the court of three judges in an action 
under subsection (a) holding this Act, or any provision 
thereof, unconstitutional shall be reviewable as a matter 
of right by direct appeal to the Supreme Court. Any such 
appeal shall be filed not more than 20 days after entry 
of such judgment, decree, or order.
SEC. 9. DEFINITIONS. 
For the purposes of this Act the following definitions 
apply: 
(1) AFFILIATE.—The term ‘‘affiliate’’ means 
any entity that controls, is controlled by, or is under 
common control with a seller. 
(2) GOVERNING BOARD.—The term ‘‘Governing 
Board’’ means the governing board established by 
the Streamlined Sales and Use Tax Agreement. 
(3) MEMBER
STATE.—The term ‘‘Member 
State’’ means a member state under the Streamlined 
Sales and Use Tax Agreement. 
(4) NATIONWIDE.—The term ‘‘nationwide’’ 
means throughout the territory of the United States, 
including any of its territories and possessions. 
(5) PERSON.—The term ‘‘person’’ means an in-
dividual, trust, estate, fiduciary, partnership, cor-
poration, or any other legal entity, and includes a 
State or local government. 
(6) REMOTE SALE AND REMOTE SELLER.—The 
terms ‘‘remote sale’’ and ‘‘remote seller’’ refer to a 
sale of goods or services attributed to a particular 
taxing jurisdiction with respect to which the seller 
did not have adequate physical presence to establish 
nexus under the law existing on the day before the 
date of enactment of this Act so as to allow such ju-
risdiction to require the seller to collect and remit 
sales or use taxes with respect to such sale. 
(7) STATE.—The term ‘‘State’’ means any 
State of the United States of America and includes 
the District of Columbia, Puerto Rico, and any other 
territory of possession of the United States. 
(8) STREAMLINED SALES AND USE TAX AGREE-
MENT.—The term ‘‘Streamlined Sales and Use Tax 
Agreement’’ (or ‘‘the Agreement’’) means the 
multistate agreement with that title adopted on No-
vember 12, 2002, and as amended from time to 
time.
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