118 
(c) STATE FLEXIBILITY.—No provision of this sec-
tion shall be construed to preempt any State law (whether 
effective before, on, or after the date of the enactment of 
this Act) that specifies periodic payments for future dam-
ages at any amount other than $50,000 or that mandates 
such payments absent the request of either party. 
SEC. 2906. PRODUCT LIABILITY FOR HEALTH CARE PRO-
VIDERS. 
A health care provider who prescribes, or who dis-
penses pursuant to a prescription, a medical product ap-
proved, licensed, or cleared by the Food and Drug Admin-
istration shall not be named as a party to a product liabil-
ity lawsuit involving such product and shall not be liable 
to a claimant in a class action lawsuit against the manu-
facturer, distributor, or seller of such product. 
SEC. 2907. DEFINITIONS. 
In this title: 
(1) ALTERNATIVE DISPUTE RESOLUTION SYS-
TEM; ADR.—The term ‘‘alternative dispute resolution 
system’’ or ‘‘ADR’’ means a system that provides 
for the resolution of health care lawsuits in a man-
ner other than through a civil action brought in a 
State or Federal court. 
(2) CLAIMANT.—The term ‘‘claimant’’ means 
any person who brings a health care lawsuit, includ-
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ing a person who asserts or claims a right to legal 
or equitable contribution, indemnity, or subrogation, 
arising out of a health care liability claim or action, 
and any person on whose behalf such a claim is as-
serted or such an action is brought, whether de-
ceased, incompetent, or a minor. 
(3) COLLATERAL
SOURCE
BENEFITS.—The 
term ‘‘collateral source benefits’’ means any amount 
paid or reasonably likely to be paid in the future to 
or on behalf of the claimant, or any service, product, 
or other benefit provided or reasonably likely to be 
provided in the future to or on behalf of the claim-
ant, as a result of the injury or wrongful death, pur-
suant to— 
(A) any State or Federal health, sickness, 
income-disability, accident, or workers’ com-
pensation law; 
(B) any health, sickness, income-disability, 
or accident insurance that provides health bene-
fits or income-disability coverage; 
(C) any contract or agreement of any 
group, organization, partnership, or corporation 
to provide, pay for, or reimburse the cost of 
medical, hospital, dental, or income-disability 
benefits; and 
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(D) any other publicly or privately funded 
program. 
(4) CONTINGENT FEE.—The term ‘‘contingent 
fee’’ includes all compensation to any person or per-
sons which is payable only if a recovery is effected 
on behalf of one or more claimants. 
(5) ECONOMIC DAMAGES.—The term ‘‘economic 
damages’’ means objectively verifiable monetary 
losses incurred as a result of the provision or use of 
(or failure to provide or use) health care services or 
medical products, such as past and future medical 
expenses, loss of past and future earnings, cost of 
obtaining domestic services, loss of employment, and 
loss of business or employment opportunities, unless 
otherwise defined under applicable state law. In no 
circumstances shall damages for health care services 
or medical products exceed the amount actually paid 
or incurred by or on behalf of the claimant. 
(6) FUTURE
DAMAGES.—The term ‘‘future 
damages’’ means any damages that are incurred 
after the date of judgment, settlement, or other reso-
lution (including mediation, or any other form of al-
ternative dispute resolution). 
(7) 
HEALTH
CARE
LAWSUIT.—The 
term 
‘‘health care lawsuit’’ means any health care liability 
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claim concerning the provision of goods or services 
for which coverage was provided in whole or in part 
via a Federal program, subsidy or tax benefit, or 
any health care liability action concerning the provi-
sion of goods or services for which coverage was pro-
vided in whole or in part via a Federal program, 
subsidy or tax benefit, brought in a State or Federal 
court or pursuant to an alternative dispute resolu-
tion system, against a health care provider regard-
less of the theory of liability on which the claim is 
based, or the number of claimants, plaintiffs, de-
fendants, or other parties, or the number of claims 
or causes of action, in which the claimant alleges a 
health care liability claim. Such term does not in-
clude a claim or action which is based on criminal 
liability; which seeks civil fines or penalties paid to 
Federal, State, or local government; or which is 
grounded in antitrust. 
(8) HEALTH
CARE
LIABILITY
ACTION.—The 
term ‘‘health care liability action’’ means a civil ac-
tion brought in a State or Federal court or pursuant 
to an alternative dispute resolution system, against 
a health care provider regardless of the theory of li-
ability on which the claim is based, or the number 
of plaintiffs, defendants, or other parties, or the 
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number of causes of action, in which the claimant al-
leges a health care liability claim. 
(9) HEALTH
CARE
LIABILITY
CLAIM.—The 
term ‘‘health care liability claim’’ means a demand 
by any person, whether or not pursuant to ADR, 
against a health care provider, including, but not 
limited to, third-party claims, cross-claims, counter- 
claims, or contribution claims, which are based upon 
the provision or use of (or the failure to provide or 
use) health care services or medical products, re-
gardless of the theory of liability on which the claim 
is based, or the number of plaintiffs, defendants, or 
other parties, or the number of causes of action. 
(10) HEALTH
CARE
PROVIDER.—The term 
‘‘health care provider’’ means any person or entity 
required by State or Federal laws or regulations to 
be licensed, registered, or certified to provide health 
care services, and being either so licensed, reg-
istered, or certified, or exempted from such require-
ment by other statute or regulation, as well as any 
other individual or entity defined as a health care 
provider, health care professional, or health care in-
stitution under state law. 
(11) HEALTH
CARE
SERVICES.—The term 
‘‘health care services’’ means the provision of any 
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goods or services (including safety, professional, or 
administrative services directly related to health 
care) by a health care provider, or by any individual 
working under the supervision of a health care pro-
vider, that relates to the diagnosis, prevention, or 
treatment of any human disease or impairment, or 
the assessment or care of the health of human 
beings. 
(12) MEDICAL PRODUCT.—The term ‘‘medical 
product’’ means a drug, device, or biological product 
intended for humans, and the terms ‘‘drug’’, ‘‘de-
vice’’, and ‘‘biological product’’ have the meanings 
given such terms in sections 201(g)(1) and 201(h) 
of the Federal Food, Drug and Cosmetic Act (21 
U.S.C. 321(g)(1) and (h)) and section 351(a) of the 
Public Health Service Act (42 U.S.C. 262(a)), re-
spectively, including any component or raw material 
used therein, but excluding health care services. 
(13) 
NONECONOMIC
DAMAGES.—The 
term 
‘‘noneconomic damages’’ means damages for phys-
ical and emotional pain, suffering, inconvenience, 
physical impairment, mental anguish, disfigurement, 
loss of enjoyment of life, loss of society and compan-
ionship, loss of consortium (other than loss of do-
mestic service), hedonic damages, injury to reputa-
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tion, and all other nonpecuniary losses of any kind 
or nature incurred as a result of the provision or use 
of (or failure to provide or use) health care services 
or medical products, unless otherwise defined under 
applicable state law. 
(14) RECOVERY.—The term ‘‘recovery’’ means 
the net sum recovered after deducting any disburse-
ments or costs incurred in connection with prosecu-
tion or settlement of the claim, including all costs 
paid or advanced by any person. Costs of health care 
incurred by the plaintiff and the attorneys’ office 
overhead costs or charges for legal services are not 
deductible disbursements or costs for such purpose. 
(15) REPRESENTATIVE.—The term ‘‘represent-
ative’’ means a legal guardian, attorney, person des-
ignated to make decisions on behalf of a patient 
under a medical power of attorney, or any person 
recognized in law or custom as a patient’s agent. 
(16) STATE.—The term ‘‘State’’ means each of 
the several States, the District of Columbia, the 
Commonwealth of Puerto Rico, the Virgin Islands, 
Guam, American Samoa, the Northern Mariana Is-
lands, the Trust Territory of the Pacific Islands, and 
any other territory or possession of the United 
States, or any political subdivision thereof. 
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SEC. 2908. EFFECT ON OTHER LAWS. 
(a) VACCINE INJURY.— 
(1) To the extent that title XXI of the Public 
Health Service Act establishes a Federal rule of law 
applicable to a civil action brought for a vaccine-re-
lated injury or death— 
(A) this title does not affect the application 
of the rule of law to such an action; and 
(B) any rule of law prescribed by this title 
in conflict with a rule of law of such title XXI 
shall not apply to such action. 
(2) If there is an aspect of a civil action 
brought for a vaccine-related injury or death to 
which a Federal rule of law under title XXI of the 
Public Health Service Act does not apply, then this 
title or otherwise applicable law (as determined 
under this title) will apply to such aspect of such ac-
tion. 
(b) OTHER FEDERAL LAW.—Except as provided in 
this section, nothing in this title shall be deemed to affect 
any defense available to a defendant in a health care law-
suit or action under any other provision of Federal law. 
SEC. 2909. RULES OF CONSTRUCTION. 
(a) HEALTH CARE LAWSUITS.—Unless otherwise 
specified in this title, the provisions governing health care 
lawsuits set forth in this title preempt, subject to sub-
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sections (b) and (c), State law to the extent that State 
law prevents the application of any provisions of law estab-
lished by or under this title. The provisions governing 
health care lawsuits set forth in this title supersede chap-
ter 171 of title 28, United States Code, to the extent that 
such chapter— 
(1) provides for a greater amount of damages 
or contingent fees, a longer period in which a health 
care lawsuit may be commenced, or a reduced appli-
cability or scope of periodic payment of future dam-
ages, than provided in this title; or 
(2) prohibits the introduction of evidence re-
garding collateral source benefits, or mandates or 
permits subrogation or a lien on collateral source 
benefits. 
(b) PROTECTION OF STATES’ RIGHTS AND OTHER 
LAWS.—Any issue that is not governed by any provision 
of law established by or under this title (including State 
standards of negligence) shall be governed by otherwise 
applicable State or Federal law. 
(c) STATE FLEXIBILITY.—No provision of this title 
shall be construed to preempt any defense available to a 
party in a health care lawsuit under any other provision 
of State or Federal law. 
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SEC. 2910. EFFECTIVE DATE. 
This title shall apply to any health care lawsuit 
brought in a Federal or State court, or subject to an alter-
native dispute resolution system, that is initiated on or 
after the date of the enactment of this Act, except that 
any health care lawsuit arising from an injury occurring 
prior to the date of the enactment of this Act shall be 
governed by the applicable statute of limitations provisions 
in effect at the time the cause of action accrued. 
SEC. 2911. LIMITATION ON EXPERT WITNESS TESTIMONY. 
(a) IN GENERAL.—No person in a health care profes-
sion requiring licensure under the laws of a State shall 
be competent to testify in any court of law to establish 
the following facts— 
(1) the recognized standard of acceptable pro-
fessional practice and the specialty thereof, if any, 
that the defendant practices, which shall be the type 
of acceptable professional practice recognized in the 
defendant’s community or in a community similar to 
the defendant’s community that was in place at the 
time the alleged injury or wrongful action occurred; 
(2) that the defendant acted with less than or 
failed to act with ordinary and reasonable care in ac-
cordance with the recognized standard; and 
(3) that as a proximate result of the defend-
ant’s negligent act or omission, the claimant suf-
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fered injuries which would not otherwise have oc-
curred, 
unless the person was licensed to practice, in the State 
or a contiguous bordering State, a profession or specialty 
which would make the person’s expert testimony relevant 
to the issues in the case and had practiced this profession 
or specialty in one of these States during the year pre-
ceding the date that the alleged injury or wrongful act 
occurred. 
(b) APPLICABILITY.—The requirements set forth in 
subsection (a) shall also apply to expert witnesses testi-
fying for the defendant as rebuttal witnesses. 
(c) WAIVER AUTHORITY.—The court may waive the 
requirements in this subsection if it determines that the 
appropriate witnesses otherwise would not be available. 
SEC. 2912. COMMUNICATIONS FOLLOWING UNANTICIPATED 
OUTCOME. 
(a) PROVIDER COMMUNICATIONS.—In any health 
care liability action, any and all statements, affirmations, 
gestures, or conduct expressing apology, fault, sympathy, 
commiseration, condolence, compassion, or a general sense 
of benevolence which are made by a health care provider 
or an employee of a health care provider to the patient, 
a relative of the patient, or a representative of the patient 
and which relate to the discomfort, pain, suffering, injury, 
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or death of the patient as the result of the unanticipated 
outcome of medical care shall be inadmissible for any pur-
pose as evidence of an admission of liability or as evidence 
of an admission against interest. 
(b) STATE FLEXIBILITY.—No provision of this sec-
tion shall be construed to preempt any State law (whether 
effective before, on, or after the date of the enactment of 
this Act) that makes additional communications inadmis-
sible as evidence of an admission of liability or as evidence 
of an admission against interest. 
SEC. 2913. EXPERT WITNESS QUALIFICATIONS. 
(a) IN GENERAL.—In any health care lawsuit, an in-
dividual shall not give expert testimony on the appropriate 
standard of practice or care involved unless the individual 
is licensed as a health professional in one or more States 
and the individual meets the following criteria: 
(1) If the party against whom or on whose be-
half the testimony is to be offered is or claims to be 
a specialist, the expert witness shall specialize at the 
time of the occurrence that is the basis for the law-
suit in the same specialty or claimed specialty as the 
party against whom or on whose behalf the testi-
mony is to be offered. If the party against whom or 
on whose behalf the testimony is to be offered is or 
claims to be a specialist who is board certified, the 
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expert witness shall be a specialist who is board cer-
tified in that specialty or claimed specialty. 
(2) During the 1-year period immediately pre-
ceding the occurrence of the action that gave rise to 
the lawsuit, the expert witness shall have devoted a 
majority of the individual’s professional time to one 
or more of the following: 
(A) The active clinical practice of the same 
health profession as the defendant and, if the 
defendant is or claims to be a specialist, in the 
same specialty or claimed specialty. 
(B) The instruction of students in an ac-
credited health professional school or accredited 
residency or clinical research program in the 
same health profession as the defendant and, if 
the defendant is or claims to be a specialist, in 
an accredited health professional school or ac-
credited residency or clinical research program 
in the same specialty or claimed specialty. 
(3) If the defendant is a general practitioner, 
the expert witness shall have devoted a majority of 
the witness’s professional time in the 1-year period 
preceding the occurrence of the action giving rise to 
the lawsuit to one or more of the following: 
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(A) Active clinical practice as a general 
practitioner. 
(B) Instruction of students in an accred-
ited health professional school or accredited 
residency or clinical research program in the 
same health profession as the defendant. 
(b) LAWSUITS AGAINST ENTITIES.—If the defendant 
in a health care lawsuit is an entity that employs a person 
against whom or on whose behalf the testimony is offered, 
the provisions of subsection (a) apply as if the person were 
the party or defendant against whom or on whose behalf 
the testimony is offered. 
(c) POWER OF COURT.—Nothing in this subsection 
shall limit the power of the trial court in a health care 
lawsuit to disqualify an expert witness on grounds other 
than the qualifications set forth under this subsection. 
(d) LIMITATION.—An expert witness in a health care 
lawsuit shall not be permitted to testify if the fee of the 
witness is in any way contingent on the outcome of the 
lawsuit. 
(e) STATE FLEXIBILITY.—No provision of this sec-
tion shall be construed to preempt any State law (whether 
effective before, on, or after the date of the enactment of 
this Act) that places additional qualification requirements 
upon any individual testifying as an expert witness. 
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SEC. 2914. AFFIDAVIT OF MERIT. 
(a) REQUIRED FILING.—Subject to subsection (b), 
the plaintiff in a health care lawsuit alleging negligence 
or, if the plaintiff is represented by an attorney, the plain-
tiff’s attorney shall file simultaneously with the health 
care lawsuit an affidavit of merit signed by a health pro-
fessional who meets the requirements for an expert wit-
ness under section 2913 of this title. The affidavit of merit 
shall certify that the health professional has reviewed the 
notice and all medical records supplied to him or her by 
the plaintiff’s attorney concerning the allegations con-
tained in the notice and shall contain a statement of each 
of the following: 
(1) The applicable standard of practice or care. 
(2) The health professional’s opinion that the 
applicable standard of practice or care was breached 
by the health professional or health facility receiving 
the notice. 
(3) The actions that should have been taken or 
omitted by the health professional or health facility 
in order to have complied with the applicable stand-
ard of practice or care. 
(4) The manner in which the breach of the 
standard of practice or care was the proximate cause 
of the injury alleged in the notice. 
(5) A listing of the medical records reviewed. 
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(b) FILING EXTENSION.—Upon motion of a party for 
good cause shown, the court in which the complaint is filed 
may grant the plaintiff or, if the plaintiff is represented 
by an attorney, the plaintiff’s attorney an additional 28 
days in which to file the affidavit required under sub-
section (a). 
(c) STATE FLEXIBILITY.—No provision of this sec-
tion shall be construed to preempt any State law (whether 
effective before, on, or after the date of the enactment of 
this Act) that establishes additional requirements for the 
filing of an affidavit of merit or similar pre-litigation docu-
mentation. 
SEC. 2915. NOTICE OF INTENT TO COMMENCE LAWSUIT. 
(a) ADVANCE NOTICE.—A person shall not com-
mence a health care lawsuit against a health care provider 
unless the person has given the health care provider 90 
days written notice before the action is commenced. 
(b) EXCEPTIONS.—A health care lawsuit against a 
health care provider filed within 6 months of the statute 
of limitations expiring as to any claimant, or within 1 year 
of the statute of repose expiring as to any claimant, shall 
be exempt from compliance with this section. 
(c) STATE FLEXIBILITY.—No provision of this sec-
tion shall be construed to preempt any State law (whether 
effective before, on, or after the date of the enactment of 
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134 
this Act) that establishes a different time period for the 
filing of written notice. 
TITLE XXX—CONSOLIDATION OF 
FEDERAL WELFARE PROGRAMS 
SEC. 3001. SENSE OF CONGRESS. 
It is the sense of Congress that all welfare programs 
should be under the jurisdiction of a single House com-
mittee and a single Senate committee. Furthermore, wel-
fare programs should be prioritized, based on their effi-
cacy, with the objective of eliminating programs that 
aren’t working and retaining those that are. 
DIVISION B—FAIR TAX ACT 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘FairTax Act of 2019’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
Sec. 2. Congressional findings. 
TITLE I—REPEAL OF THE INCOME TAX, PAYROLL TAXES, AND 
ESTATE AND GIFT TAXES 
Sec. 101. Income taxes repealed. 
Sec. 102. Payroll taxes repealed. 
Sec. 103. Estate and gift taxes repealed. 
Sec. 104. Conforming amendments; effective date. 
TITLE II—SALES TAX ENACTED 
Sec. 201. Sales tax. 
Sec. 202. Conforming and technical amendments. 
TITLE III—OTHER MATTERS 
Sec. 301. Phase-out of administration of repealed Federal taxes. 
Sec. 302. Administration of other Federal taxes. 
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Sec. 303. Sales tax inclusive Social Security benefits indexation. 
TITLE IV—SUNSET OF SALES TAX IF SIXTEENTH AMENDMENT 
NOT REPEALED 
Sec. 401. Elimination of sales tax if Sixteenth Amendment not repealed. 
SEC. 2. CONGRESSIONAL FINDINGS. 
(a) FINDINGS
RELATING
TO
FEDERAL
INCOME 
TAX.—Congress finds the Federal income tax— 
(1) retards economic growth and has reduced 
the standard of living of the American public; 
(2) impedes the international competitiveness of 
United States industry; 
(3) reduces savings and investment in the 
United States by taxing income multiple times; 
(4) slows the capital formation necessary for 
real wages to steadily increase; 
(5) lowers productivity; 
(6) imposes unacceptable and unnecessary ad-
ministrative and compliance costs on individual and 
business taxpayers; 
(7) is unfair and inequitable; 
(8) unnecessarily intrudes upon the privacy and 
civil rights of United States citizens; 
(9) hides the true cost of government by embed-
ding taxes in the costs of everything Americans buy; 
(10) is not being complied with at satisfactory 
levels and therefore raises the tax burden on law 
abiding citizens; and 
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(11) impedes upward social mobility. 
(b) FINDINGS RELATING
TO FEDERAL PAYROLL 
TAXES.—Congress finds further that the Social Security 
and Medicare payroll taxes and self-employment taxes— 
(1) raise the cost of employment; 
(2) destroy jobs and cause unemployment; and 
(3) have a disproportionately adverse impact on 
lower income Americans. 
(c) FINDINGS RELATING TO FEDERAL ESTATE AND 
GIFT TAXES.—Congress finds further that the Federal es-
tate and gift taxes— 
(1) force family businesses and farms to be sold 
by the family to pay such taxes; 
(2) discourage capital formation and entrepre-
neurship; 
(3) foster the continued dominance of large en-
terprises over small family-owned companies and 
farms; and 
(4) impose unacceptably high tax planning costs 
on small businesses and farms. 
(d) FINDINGS
RELATING
TO
NATIONAL
SALES 
TAX.—Congress finds further that a broad-based national 
sales tax on goods and services purchased for final con-
sumption— 
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(1) is similar in many respects to the sales and 
use taxes in place in 45 of the 50 States; 
(2) will promote savings and investment; 
(3) will promote fairness; 
(4) will promote economic growth; 
(5) will raise the standard of living; 
(6) will increase investment; 
(7) will enhance productivity and international 
competitiveness; 
(8) will reduce administrative burdens on the 
American taxpayer; 
(9) will improve upward social mobility; and 
(10) will respect the privacy interests and civil 
rights of taxpayers. 
(e) FINDINGS RELATING TO ADMINISTRATION OF 
NATIONAL SALES TAX.—Congress further finds that— 
(1) most of the practical experience admin-
istering sales taxes is found at the State govern-
mental level; 
(2) it is desirable to harmonize Federal and 
State collection and enforcement efforts to the max-
imum extent possible; 
(3) it is sound tax administration policy to fos-
ter administration and collection of the Federal sales 
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tax at the State level in return for a reasonable ad-
ministration fee to the States; and 
(4) businesses that must collect and remit taxes 
should receive reasonable compensation for the cost 
of doing so. 
(f) FINDINGS RELATING TO REPEAL OF PRESENT 
FEDERAL TAX SYSTEM.—Congress further finds that the 
16th Amendment to the United States Constitution should 
be repealed. 
TITLE I—REPEAL OF THE IN-
COME TAX, PAYROLL TAXES, 
AND ESTATE AND GIFT TAXES 
SEC. 101. INCOME TAXES REPEALED. 
Subtitle A of the Internal Revenue Code of 1986 (re-
lating to income taxes and self-employment taxes) is re-
pealed. 
SEC. 102. PAYROLL TAXES REPEALED. 
(a) IN GENERAL.—Subtitle C of the Internal Rev-
enue Code of 1986 (relating to payroll taxes and with-
holding of income taxes) is repealed. 
(b) FUNDING OF SOCIAL SECURITY.—For funding of 
the Social Security Trust Funds from general revenue, see 
section 201 of the Social Security Act (42 U.S.C. 401). 
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139 
SEC. 103. ESTATE AND GIFT TAXES REPEALED. 
Subtitle B of the Internal Revenue Code of 1986 (re-
lating to estate and gift taxes) is repealed. 
SEC. 104. CONFORMING AMENDMENTS; EFFECTIVE DATE. 
(a) CONFORMING AMENDMENTS.—The Internal Rev-
enue Code of 1986 is amended— 
(1) by striking subtitle H (relating to financing 
of Presidential election campaigns); and 
(2) by redesignating— 
(A) subtitle D (relating to miscellaneous 
excise taxes) as subtitle B; 
(B) subtitle E (relating to alcohol, tobacco, 
and certain other excise taxes) as subtitle C; 
(C) subtitle F (relating to procedure and 
administration) as subtitle D; 
(D) subtitle G (relating to the Joint Com-
mittee on Taxation) as subtitle E; 
(E) subtitle I (relating to the Trust Fund 
Code) as subtitle F; 
(F) subtitle J (relating to coal industry 
health benefits) as subtitle G; and 
(G) subtitle K (relating to group health 
plan portability, access, and renewability re-
quirements) as subtitle H. 
(b) REDESIGNATION OF 1986 CODE.— 
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(1) IN GENERAL.—The Internal Revenue Code 
of 1986 enacted on October 22, 1986, as heretofore, 
hereby, or hereafter amended, may be cited as the 
Internal Revenue Code of 2019. 
(2) REFERENCES IN LAWS, ETC.—Except when 
inappropriate, any reference in any law, Executive 
order, or other document— 
(A) to the Internal Revenue Code of 1986 
shall include a reference to the Internal Rev-
enue Code of 2019; and 
(B) to the Internal Revenue Code of 2019 
shall include a reference to the provisions of law 
formerly known as the Internal Revenue Code 
of 1986. 
(c) ADDITIONAL AMENDMENTS.—For additional con-
forming amendments, see section 202 of this Act. 
(d) EFFECTIVE DATE.—Except as otherwise pro-
vided in this Act, the amendments made by this Act shall 
take effect on January 1, 2021. 
TITLE II—SALES TAX ENACTED 
SEC. 201. SALES TAX. 
(a) IN GENERAL.—The Internal Revenue Code of 
2019 is amended by inserting before subtitle B (as redes-
ignated by section 104(a)(2)(A)) the following new sub-
title: 
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‘‘Subtitle A—Sales Tax 
‘‘Sec. 1. Principles of interpretation. 
‘‘Sec. 2. Definitions. 
‘‘CHAPTER 1. INTERPRETATION; DEFINITIONS; IMPOSITION OF TAX; ETC. 
‘‘CHAPTER 2. CREDITS; REFUNDS 
‘‘CHAPTER 3. FAMILY CONSUMPTION ALLOWANCE 
‘‘CHAPTER 4. FEDERAL AND STATE COOPERATIVE TAX ADMINISTRATION 
‘‘CHAPTER 5. OTHER ADMINISTRATIVE PROVISIONS 
‘‘CHAPTER 6. COLLECTIONS; APPEALS; TAXPAYER RIGHTS 
‘‘CHAPTER 7. SPECIAL RULES 
‘‘CHAPTER 8. FINANCIAL INTERMEDIATION SERVICES 
‘‘CHAPTER 9. ADDITIONAL MATTERS 
‘‘SEC. 1. PRINCIPLES OF INTERPRETATION. 
‘‘(a) IN GENERAL.—Any court, the Secretary, and 
any sales tax administering authority shall consider the 
purposes of this subtitle (as set forth in subsection (b)) 
as the primary aid in statutory construction. 
‘‘(b) PURPOSES.—The purposes of this subtitle are 
as follows: 
‘‘(1) To raise revenue needed by the Federal 
Government in a manner consistent with the other 
purposes of this subtitle. 
‘‘(2) To tax all consumption of goods and serv-
ices in the United States once, without exception, 
but only once. 
‘‘(3) To prevent double, multiple, or cascading 
taxation. 
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‘‘(4) To simplify the tax law and reduce the ad-
ministration costs of, and the costs of compliance 
with, the tax law. 
‘‘(5) To provide for the administration of the 
tax law in a manner that respects privacy, due proc-
ess, individual rights when interacting with the gov-
ernment, the presumption of innocence in criminal 
proceedings, and the presumption of lawful behavior 
in civil proceedings. 
‘‘(6) To increase the role of State governments 
in Federal tax administration because of State gov-
ernment expertise in sales tax administration. 
‘‘(7) To enhance generally cooperation and co-
ordination among State tax administrators; and to 
enhance cooperation and coordination among Fed-
eral and State tax administrators, consistent with 
the principle of intergovernmental tax immunity. 
‘‘(c) SECONDARY AIDS TO STATUTORY CONSTRUC-
TION.—As a secondary aid in statutory construction, any 
court, the Secretary, and any sales tax administering au-
thority shall consider— 
‘‘(1) the common law canons of statutory con-
struction, 
‘‘(2) the meaning and construction of concepts 
and terms used in the Internal Revenue Code of 
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1986 as in effect before the effective date of this 
subtitle, and 
‘‘(3) construe any ambiguities in this Act in 
favor of reserving powers to the States respectively, 
or to the people. 
‘‘SEC. 2. DEFINITIONS. 
‘‘(a) IN GENERAL.—For purposes of this subtitle— 
‘‘(1) AFFILIATED FIRMS.—A firm is affiliated 
with another if 1 firm owns 50 percent or more of— 
‘‘(A) the voting shares in a corporation, or 
‘‘(B) the capital interests of a business 
firm that is not a corporation. 
‘‘(2) CONFORMING
STATE
SALES
TAX.—The 
term ‘conforming State sales tax’ means a sales tax 
imposed by a State that adopts the same definition 
of taxable property and services as adopted by this 
subtitle. 
‘‘(3) DESIGNATED COMMERCIAL PRIVATE COU-
RIER
SERVICE.—The term ‘designated commercial 
private courier service’ means a firm designated as 
such by the Secretary or any sales tax administering 
authority, upon application of the firm, if the firm— 
‘‘(A) provides its services to the general 
public, 
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144 
‘‘(B) records electronically to its data base 
kept in the regular course of its business the 
date on which an item was given to such firm 
for delivery, and 
‘‘(C) has been operating for at least 1 
year. 
‘‘(4) EDUCATION
AND
TRAINING.—The term 
‘education and training’ means tuition for primary, 
secondary, or postsecondary level education, and job- 
related training courses. Such term does not include 
room, board, sports activities, recreational activities, 
hobbies, games, arts or crafts or cultural activities. 
‘‘(5) GROSS PAYMENTS.—The term ‘gross pay-
ments’ means payments for taxable property or serv-
ices, including Federal taxes imposed by this title. 
‘‘(6) INTANGIBLE PROPERTY.— 
‘‘(A) IN GENERAL.—The term ‘intangible 
property’ includes copyrights, trademarks, pat-
ents, goodwill, financial instruments, securities, 
commercial paper, debts, notes and bonds, and 
other property deemed intangible at common 
law. The Secretary shall, by regulation resolve 
differences among the provisions of common 
law of the several States. 
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‘‘(B) CERTAIN
TYPES
OF
PROPERTY.— 
Such term does not include tangible personal 
property (or rents or leaseholds of any term 
thereon), real property (or rents or leaseholds 
of any term thereon) and computer software. 
‘‘(7) PERSON.—The term ‘person’ means any 
natural person, and unless the context clearly does 
not allow it, any corporation, partnership, limited li-
ability company, trust, estate, government, agency, 
administration, organization, association, or other 
legal entity (foreign or domestic). 
‘‘(8) PRODUCE, PROVIDE, RENDER, OR
SELL 
TAXABLE PROPERTY OR SERVICES.— 
‘‘(A) IN GENERAL.—A taxable property or 
service is used to produce, provide, render, or 
sell a taxable property or service if such prop-
erty or service is purchased by a person en-
gaged in a trade or business for the purpose of 
employing or using such taxable property or 
service in the production, provision, rendering, 
or sale of other taxable property or services in 
the ordinary course of that trade or business. 
‘‘(B) 
RESEARCH, 
EXPERIMENTATION, 
TESTING, AND DEVELOPMENT.—Taxable prop-
erty or services used in a trade or business for 
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146 
the purpose of research, experimentation, test-
ing, and development shall be treated as used to 
produce, provide, render, or sell taxable prop-
erty or services. 
‘‘(C) 
INSURANCE
PAYMENTS.—Taxable 
property or services purchased by an insurer on 
behalf of an insured shall be treated as used to 
produce, provide, render, or sell taxable prop-
erty or services if the premium for the insur-
ance contract giving rise to the insurer’s obliga-
tion was subject to tax pursuant to section 801 
(relating to financial intermediation services). 
‘‘(D) EDUCATION
AND
TRAINING.—Edu-
cation and training shall be treated as services 
used to produce, provide, render, or sell taxable 
property or services. 
‘‘(9) REGISTERED
SELLER.—The term ‘reg-
istered seller’ means a person registered pursuant to 
section 502. 
‘‘(10) SALES
TAX
ADMINISTERING
AUTHOR-
ITY.—The term ‘sales tax administering authority’ 
means— 
‘‘(A) the State agency designated to collect 
and administer the sales tax imposed by this 
subtitle, in an administering State, or 
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‘‘(B) the Secretary, in a State that is nei-
ther— 
‘‘(i) an administering State, nor 
‘‘(ii) a State that has elected to have 
its sales tax administered by an admin-
istering State. 
‘‘(11) 
SECRETARY.—The 
term 
‘Secretary’ 
means the Secretary of the Treasury. 
‘‘(12) TAXABLE EMPLOYER.— 
‘‘(A) IN GENERAL.—The term ‘taxable em-
ployer’ includes— 
‘‘(i) any household employing domes-
tic servants, and 
‘‘(ii) any government except for gov-
ernment enterprises (as defined in section 
704). 
‘‘(B) EXCEPTIONS.—The term ‘taxable 
employer’ does not include any employer which 
is— 
‘‘(i) engaged in a trade or business, 
‘‘(ii) a not-for-profit organization (as 
defined in section 706), or 
‘‘(iii) a government enterprise (as de-
fined in section 704). 
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‘‘(C) CROSS REFERENCE.—For rules relat-
ing to collection and remittance of tax on wages 
by taxable employers, see section 103(b)(2). 
‘‘(13) TAX INCLUSIVE FAIR MARKET VALUE.— 
The term ‘tax inclusive fair market value’ means the 
fair market value of taxable property or services plus 
the tax imposed by this subtitle. 
‘‘(14) TAXABLE PROPERTY OR SERVICE.— 
‘‘(A) GENERAL RULE.—The term ‘taxable 
property or service’ means— 
‘‘(i) any property (including leaseholds 
of any term or rents with respect to such 
property) but excluding— 
‘‘(I) intangible property, and 
‘‘(II) used property, and 
‘‘(ii) any service (including any finan-
cial intermediation services as determined 
by section 801). 
‘‘(B) SERVICE.—For purposes of subpara-
graph (A), the term ‘service’— 
‘‘(i) shall include any service per-
formed by an employee for which the em-
ployee is paid wages or a salary by a tax-
able employer, and 
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149 
‘‘(ii) shall not include any service per-
formed by an employee for which the em-
ployee is paid wages or a salary— 
‘‘(I) by an employer in the reg-
ular course of the employer’s trade or 
business, 
‘‘(II) by an employer that is a 
not-for-profit organization (as defined 
in section 706), 
‘‘(III) by an employer that is a 
government enterprise (as defined in 
section 704), and 
‘‘(IV) by taxable employers to 
employees directly providing education 
and training. 
‘‘(15) UNITED
STATES.—The term ‘United 
States’, when used in the geographical sense, means 
each of the 50 States, the District of Columbia, and 
any commonwealth, territory, or possession of the 
United States. 
‘‘(16) USED PROPERTY.—The term ‘used prop-
erty’ means— 
‘‘(A) property on which the tax imposed by 
section 101 has been collected and for which no 
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credit has been allowed under section 202, 203, 
or 205, or 
‘‘(B) property that was held other than for 
a business purpose (as defined in section 
102(b)) on December 31, 2020. 
‘‘(17) WAGES AND SALARY.—The terms ‘wage’ 
and ‘salary’ mean all compensation paid for employ-
ment service including cash compensation, employee 
benefits, disability insurance, or wage replacement 
insurance payments, unemployment compensation 
insurance, workers’ compensation insurance, and the 
fair market value of any other consideration paid by 
an employer to an employee in consideration for em-
ployment services rendered. 
‘‘(b) CROSS REFERENCES.— 
‘‘(1) For the definition of business purposes, 
see section 102(b). 
‘‘(2) For the definition of insurance contract, 
see section 206(e). 
‘‘(3) For the definition of qualified family, see 
section 302. 
‘‘(4) For the definition of monthly poverty level, 
see section 303. 
‘‘(5) For the definition of large seller, see sec-
tion 501(e)(3). 
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151 
‘‘(6) For the definition of hobby activities, see 
section 701. 
‘‘(7) For the definition of gaming sponsor, see 
section 701(a). 
‘‘(8) For the definition of a chance, see section 
701(b). 
‘‘(9) For the definition of government enter-
prise, see section 704(b). 
‘‘(10) For the definition of mixed use property, 
see section 705. 
‘‘(11) For the definition of qualified not-for- 
profit organization, see section 706. 
‘‘(12) For the definition of financial intermedi-
ation services, see section 801. 
‘‘CHAPTER 1—INTERPRETATION; 
DEFINITIONS; IMPOSITION OF TAX; ETC. 
‘‘Sec. 101. Imposition of sales tax. 
‘‘Sec. 102. Intermediate and export sales. 
‘‘Sec. 103. Rules relating to collection and remittance of tax. 
‘‘SEC. 101. IMPOSITION OF SALES TAX. 
‘‘(a) IN GENERAL.—There is hereby imposed a tax 
on the use or consumption in the United States of taxable 
property or services. 
‘‘(b) RATE.— 
‘‘(1) FOR 2021.—In the calendar year 2021, the 
rate of tax is 23 percent of the gross payments for 
the taxable property or service. 
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‘‘(2) FOR YEARS AFTER 2021.—For years after 
the calendar year 2021, the rate of tax is the com-
bined Federal tax rate percentage (as defined in 
paragraph (3)) of the gross payments for the taxable 
property or service. 
‘‘(3) COMBINED FEDERAL TAX RATE PERCENT-
AGE.—The combined Federal tax rate percentage is 
the sum of— 
‘‘(A) the general revenue rate (as defined 
in paragraph (4)), 
‘‘(B) the old-age, survivors and disability 
insurance rate, and 
‘‘(C) the hospital insurance rate. 
‘‘(4) GENERAL REVENUE RATE.—The general 
revenue rate shall be 14.91 percent. 
‘‘(c) COORDINATION WITH IMPORT DUTIES.—The 
tax imposed by this section is in addition to any import 
duties imposed by chapter 4 of title 19, United States 
Code. The Secretary shall provide by regulation that, to 
the maximum extent practicable, the tax imposed by this 
section on imported taxable property and services is col-
lected and administered in conjunction with any applicable 
import duties imposed by the United States. 
‘‘(d) LIABILITY FOR TAX.— 
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154 
ment functions that do not constitute the final con-
sumption of property or services. 
‘‘(b) BUSINESS PURPOSES.—For purposes of this 
section, the term ‘purchased for a business purpose in a 
trade or business’ means purchased by a person engaged 
in a trade or business and used in that trade or business— 
‘‘(1) for resale, 
‘‘(2) to produce, provide, render, or sell taxable 
property or services, or 
‘‘(3) in furtherance of other bona fide business 
purposes. 
‘‘(c) INVESTMENT PURPOSES.—For purposes of this 
section, the term ‘purchased for an investment purpose’ 
means property purchased exclusively for purposes of ap-
preciation or the production of income but not entailing 
more than minor personal efforts. 
‘‘SEC. 103. RULES RELATING TO COLLECTION AND REMIT-
TANCE OF TAX. 
‘‘(a) LIABILITY FOR COLLECTION AND REMITTANCE 
OF THE TAX.—Except as provided otherwise by this sec-
tion, any tax imposed by this subtitle shall be collected 
and remitted by the seller of taxable property or services 
(including financial intermediation services). 
‘‘(b) TAX TO BE REMITTED BY PURCHASER IN CER-
TAIN CIRCUMSTANCES.— 
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‘‘(1) IN GENERAL.—In the case of taxable prop-
erty or services purchased outside of the United 
States and imported into the United States for use 
or consumption in the United States, the purchaser 
shall remit the tax imposed by section 101. 
‘‘(2) CERTAIN WAGES OR SALARY.—In the case 
of wages or salary paid by a taxable employer which 
are taxable services, the employer shall remit the tax 
imposed by section 101. 
‘‘(c) CONVERSION OF BUSINESS OR EXPORT PROP-
ERTY OR SERVICES.—Property or services purchased for 
a business purpose in a trade or business or for export 
(sold untaxed pursuant to section 102(a)) that is subse-
quently converted to personal use shall be deemed pur-
chased at the time of conversion and shall be subject to 
the tax imposed by section 101 at the fair market value 
of the converted property as of the date of conversion. The 
tax shall be due as if the property had been sold at the 
fair market value during the month of conversion. The 
person using or consuming the converted property is liable 
for and shall remit the tax. 
‘‘(d) BARTER TRANSACTIONS.—If gross payment for 
taxable property or services is made in other than money, 
then the person responsible for collecting and remitting 
the tax shall remit the tax to the sales tax administering 
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authority in money as if gross payment had been made 
in money at the tax inclusive fair market value of the tax-
able property or services purchased. 
‘‘CHAPTER 2—CREDITS; REFUNDS 
‘‘Sec. 201. Credits and refunds. 
‘‘Sec. 202. Business use conversion credit. 
‘‘Sec. 203. Intermediate and export sales credit. 
‘‘Sec. 204. Administration credit. 
‘‘Sec. 205. Bad debt credit. 
‘‘Sec. 206. Insurance proceeds credit. 
‘‘Sec. 207. Refunds. 
‘‘SEC. 201. CREDITS AND REFUNDS. 
‘‘(a) IN GENERAL.—Each person shall be allowed a 
credit with respect to the taxes imposed by section 101 
for each month in an amount equal to the sum of— 
‘‘(1) such person’s business use conversion 
credit pursuant to section 202 for such month, 
‘‘(2) such person’s intermediate and export 
sales credit pursuant to section 203 for such month, 
‘‘(3) the administration credit pursuant to sec-
tion 204 for such month, 
‘‘(4) the bad debt credit pursuant to section 
205 for such month, 
‘‘(5) the insurance proceeds credit pursuant to 
section 206 for such month, 
‘‘(6) the transitional inventory credit pursuant 
to section 902, and 
‘‘(7) any amount paid in excess of the amount 
due. 
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‘‘(b) CREDITS NOT ADDITIVE.—Only one credit al-
lowed by chapter 2 may be taken with respect to any par-
ticular gross payment. 
‘‘SEC. 202. BUSINESS USE CONVERSION CREDIT. 
‘‘(a) IN GENERAL.—For purposes of section 201, a 
person’s business use conversion credit for any month is 
the aggregate of the amounts determined under subsection 
(b) with respect to taxable property and services— 
‘‘(1) on which tax was imposed by section 101 
(and actually paid), and 
‘‘(2) which commenced to be 95 percent or 
more used during such month for business purposes 
(within the meaning of section 102(b)). 
‘‘(b) AMOUNT OF CREDIT.—The amount determined 
under this paragraph with respect to any taxable property 
or service is the lesser of— 
‘‘(1) the product of— 
‘‘(A) the rate imposed by section 101, and 
‘‘(B) the quotient that is— 
‘‘(i) the fair market value of the prop-
erty or service when its use is converted, 
divided by 
‘‘(ii) the quantity that is one minus 
the tax rate imposed by section 101, or 
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‘‘(2) the amount of tax paid with respect to 
such taxable property or service, including the 
amount, if any, determined in accordance with sec-
tion 705 (relating to mixed use property). 
‘‘SEC. 203. INTERMEDIATE AND EXPORT SALES CREDIT. 
‘‘For purposes of section 201, a person’s intermediate 
and export sales credit is the amount of sales tax paid 
on the purchase of any taxable property or service pur-
chased for— 
‘‘(1) a business purpose in a trade or business 
(as defined in section 102(b)), or 
‘‘(2) export from the United States for use or 
consumption outside the United States. 
‘‘SEC. 204. ADMINISTRATION CREDIT. 
‘‘(a) IN GENERAL.—Every person filing a timely 
monthly report (with regard to extensions) in compliance 
with section 501 shall be entitled to a taxpayer adminis-
trative credit equal to the greater of— 
‘‘(1) $200, or 
‘‘(2) one-quarter of 1 percent of the tax remit-
ted. 
‘‘(b) LIMITATION.—The credit allowed under this sec-
tion shall not exceed 20 percent of the tax due to be remit-
ted prior to the application of any credit or credits per-
mitted by section 201. 
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‘‘SEC. 205. BAD DEBT CREDIT. 
‘‘(a) FINANCIAL INTERMEDIATION SERVICES.—Any 
person who has experienced a bad debt (other than unpaid 
invoices within the meaning of subsection (b)) shall be en-
titled to a credit equal to the product of— 
‘‘(1) the rate imposed by section 101, and 
‘‘(2) the quotient that is— 
‘‘(A) the amount of the bad debt (as de-
fined in section 802), divided by 
‘‘(B) the quantity that is one minus the 
rate imposed by section 101. 
‘‘(b) UNPAID INVOICES.—Any person electing the ac-
crual method pursuant to section 503 that has with re-
spect to a transaction— 
‘‘(1) invoiced the tax imposed by section 101, 
‘‘(2) remitted the invoiced tax, 
‘‘(3) actually delivered the taxable property or 
performed the taxable services invoiced, and 
‘‘(4) not been paid 180 days after date the in-
voice was due to be paid, 
shall be entitled to a credit equal to the amount of tax 
remitted and unpaid by the purchaser. 
‘‘(c) SUBSEQUENT PAYMENT.—Any payment made 
with respect to a transaction subsequent to a section 205 
credit being taken with respect to that transaction shall 
be subject to tax in the month the payment was received 
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as if a tax inclusive sale of taxable property and services 
in the amount of the payment had been made. 
‘‘(d) PARTIAL PAYMENTS.—Partial payments shall 
be treated as pro rata payments of the underlying obliga-
tion and shall be allocated proportionately— 
‘‘(1) for fully taxable payments, between pay-
ment for the taxable property and service and tax, 
and 
‘‘(2) for partially taxable payments, among pay-
ment for the taxable property and service, tax and 
other payment. 
‘‘(e) RELATED PARTIES.—The credit provided by this 
section shall not be available with respect to sales made 
to related parties. For purposes of this section, related 
party means affiliated firms and family members (as de-
fined in section 302(b)). 
‘‘SEC. 206. INSURANCE PROCEEDS CREDIT. 
‘‘(a) IN GENERAL.—A person receiving a payment 
from an insurer by virtue of an insurance contract shall 
be entitled to a credit in an amount determined by sub-
section (b), less any amount paid to the insured by the 
insurer pursuant to subsection (c), if the entire premium 
(except that portion allocable to the investment account 
of the underlying policy) for the insurance contract giving 
rise to the insurer’s obligation to make a payment to the 
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insured was subject to the tax imposed by section 101 and 
said tax was paid. 
‘‘(b) CREDIT AMOUNT.—The amount of the credit 
shall be the product of— 
‘‘(1) the rate imposed by section 101, and 
‘‘(2) the quotient that is— 
‘‘(A) the amount of the payment made by 
the insurer to the insured, divided by 
‘‘(B) the quantity that is one minus the 
rate imposed by section 101. 
‘‘(c) ADMINISTRATIVE OPTION.—The credit deter-
mined in accordance with subsection (b) shall be paid by 
the insurer to the insured and the insurer shall be entitled 
to the credit in lieu of the insured, except that the insurer 
may elect, in a form prescribed by the Secretary, to not 
pay the credit and require the insured to make application 
for the credit. In the event of such election, the insurer 
shall provide to the Secretary and the insured the name 
and tax identification number of the insurer and of the 
insured and indicate the proper amount of the credit. 
‘‘(d) COORDINATION WITH RESPECT
TO EXEMP-
TION.—If taxable property or services purchased by an in-
surer on behalf of an insured are purchased free of tax 
by virtue of section 2(a)(8)(C), then the credit provided 
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by this section shall not be available with respect to that 
purchase. 
‘‘(e) INSURANCE CONTRACT.—For purposes of sub-
section (a), the term ‘insurance contract’ shall include a 
life insurance contract, a health insurance contract, a 
property and casualty loss insurance contract, a general 
liability insurance contract, a marine insurance contract, 
a fire insurance contract, an accident insurance contract, 
a disability insurance contract, a long-term care insurance 
contract, and an insurance contract that provides a com-
bination of these types of insurance. 
‘‘SEC. 207. REFUNDS. 
‘‘(a) REGISTERED SELLERS.—If a registered seller 
files a monthly tax report with an overpayment, then, 
upon application by the registered seller in a form pre-
scribed by the sales tax administering authority, the over-
payment shown on the report shall be refunded to the reg-
istered seller within 60 days of receipt of said application. 
In the absence of such application, the overpayment may 
be carried forward, without interest, by the person entitled 
to the credit. 
‘‘(b) OTHER PERSONS.—If a person other than a reg-
istered seller has an overpayment for any month, then, 
upon application by the person in a form prescribed by 
the sales tax administering authority, the credit balance 
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due shall be refunded to the person within 60 days of re-
ceipt of said application. 
‘‘(c) INTEREST.—No interest shall be paid on any 
balance due from the sales tax administering authority 
under this subsection for any month if such balance due 
is paid within 60 days after the application for refund is 
received. Balances due not paid within 60 days after the 
application for refund is received shall bear interest from 
the date of application. Interest shall be paid at the Fed-
eral short-term rate (as defined in section 511). 
‘‘(d) SUSPENSION
OF PERIOD TO PAY REFUND 
ONLY IF FEDERAL OR STATE COURT RULING.—The 60- 
day periods under subsections (a) and (b) shall be sus-
pended with respect to a purported overpayment (or por-
tion thereof) only during any period that there is in effect 
a preliminary, temporary, or final ruling from a Federal 
or State court that there is reasonable cause to believe 
that such overpayment may not actually be due. 
‘‘CHAPTER 3—FAMILY CONSUMPTION 
ALLOWANCE 
‘‘Sec. 301. Family consumption allowance. 
‘‘Sec. 302. Qualified family. 
‘‘Sec. 303. Monthly poverty level. 
‘‘Sec. 304. Rebate mechanism. 
‘‘Sec. 305. Change in family circumstances. 
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‘‘SEC. 301. FAMILY CONSUMPTION ALLOWANCE. 
‘‘Each qualified family shall be eligible to receive a 
sales tax rebate each month. The sales tax rebate shall 
be in an amount equal to the product of— 
‘‘(1) the rate of tax imposed by section 101, 
and 
‘‘(2) the monthly poverty level. 
‘‘SEC. 302. QUALIFIED FAMILY. 
‘‘(a) GENERAL RULE.—For purposes of this chapter, 
the term ‘qualified family’ shall mean one or more family 
members sharing a common residence. All family members 
sharing a common residence shall be considered as part 
of one qualified family. 
‘‘(b) FAMILY SIZE DETERMINATION.— 
‘‘(1) IN GENERAL.—To determine the size of a 
qualified family for purposes of this chapter, family 
members shall mean— 
‘‘(A) an individual, 
‘‘(B) the individual’s spouse, 
‘‘(C) all lineal ancestors and descendants 
of said individual (and such individual’s 
spouse), 
‘‘(D) all legally adopted children of such 
individual (and such individual’s spouse), and 
‘‘(E) all children under legal guardianship 
of such individual (or such individual’s spouse). 
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‘‘(2) 
IDENTIFICATION
REQUIREMENTS.—In 
order for a person to be counted as a member of the 
family for purposes of determining the size of the 
qualified family, such person must— 
‘‘(A) have a bona fide Social Security num-
ber, and 
‘‘(B) be a lawful resident of the United 
States. 
‘‘(c) CHILDREN LIVING AWAY FROM HOME.— 
‘‘(1) STUDENTS LIVING AWAY FROM HOME.— 
Any person who was a registered student during not 
fewer than 5 months in a calendar year while living 
away from the common residence of a qualified fam-
ily but who receives over 50 percent of such person’s 
support during a calendar year from members of the 
qualified family shall be included as part of the fam-
ily unit whose members provided said support for 
purposes of this chapter. 
‘‘(2) CHILDREN OF DIVORCED OR SEPARATED 
PARENTS.—If a child’s parents are divorced or le-
gally separated, a child for purposes of this chapter 
shall be treated as part of the qualified family of the 
custodial parent. In cases of joint custody, the custo-
dial parent for purposes of this chapter shall be the 
parent that has custody of the child for more than 
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