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U.S.C. 1771 et seq.). The Secretary shall direct State
agencies administering the school lunch program under
this Act and the school breakfast program under the Child
Nutrition Act of 1966 to collect this information annually
and to provide it on a timely basis to the State agency
administering the program under this section.’’.
(c) GRANTS TO STATES TO PROVIDE ASSISTANCE TO
FAMILY OR GROUP DAY CARE HOMES.—Section 17(f)(3)
of such Act (42 U.S.C. 1766(f)(3)) is amended by insert-
ing after subparagraph (B) (as added by subsection
(b)(2)) the following new subparagraph:
‘‘(C)(i) From amounts appropriated to carry out this
section, the Secretary shall reserve $2,000,000 in fiscal
year 1995 and $5,000,000 in fiscal year 1996 to provide
grants to States for the purpose of providing grants to
family and day care home sponsoring organizations and
other appropriate organizations to secure and provide
training, materials, automated data processing assistance,
and other assistance for the staff of such sponsoring orga-
nizations and for family and group day care homes in
order to assist in the implementation of the requirements
contained in subparagraph (A).
‘‘(ii) From amounts appropriated to carry out this
section, the Secretary shall reserve $5,000,000 in fiscal
year 1997 and in each fiscal year thereafter to provide
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grants to States for the purpose of making grants to fam-
ily or group day care home sponsoring organizations and
other appropriate organizations to assist low- or moderate-
income family or group day care homes (as such term is
defined in subparagraph (A)(ii)(II)) become licensed or
registered for the program under this section or overcome
other barriers to the program.’’.
(d) EFFECTIVE DATES.—(1) The amendments made
by subsections (a) and (b) shall take effect on July 1,
1996.
(2) The amendments made by subsection (c) shall
take effect on the date of the enactment of this Act.
Subtitle E—Collection of Certain
State and Local Taxes on Out-of-
State Sales
SEC. 741. SHORT TITLE.
This subtitle may be cited as the ‘‘Tax Fairness for
Main Street Business Act of 1994’’.
SEC. 742. FINDINGS.
The Congress finds that—
(1) sales by out-of-State firms already are sub-
ject to State and local sales taxes, but State and
local governments are unable to compel out-of-State
firms to collect and remit such taxes,
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(2) small businesses, which are compelled to
collect State and local sales taxes, are subject to un-
fair competition when out-of-State firms cannot be
compelled to collect and remit such taxes on their
sales to residents of the State,
(3) State and local governments provide a num-
ber of resources to out-of-State firms including gov-
ernment services relating to mail delivery, commu-
nications, bank and court systems, and disposal of
tons of catalogs,
(4) the inability of State and local governments
to require out-of-State firms to collect and remit
sales taxes deprives State and local governments of
needed revenue and forces such State and local gov-
ernments to raise taxes on taxpayers, including
small businesses, in such State,
(5) the Supreme Court ruled in Quill v. North
Dakota, 112 U.S. 1904 (1992) that the due process
clause of the Constitution does not prohibit a State
government from imposing personal jurisdiction and
tax obligations on out-of-State firms that purpose-
fully solicit sales from residents therein, and that
the Congress has the power to authorize State gov-
ernments to require out-of-State firms to collect
State and local sales taxes, and
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(6) as a matter of federalism, the Federal Gov-
ernment has a duty to assist State and local govern-
ments in collecting sales taxes on sales from out-of-
State firms.
SEC. 743. SENSE OF CONGRESS.
Congress recognizes that some States will be ad-
versely affected by the provisions of this Act which deny
immigrants certain public assistance and pledges to help
those States offset the potential cost shift. In authorizing
States to require out-of-State companies to collect sales
taxes on mail order purchases, Congress encourages
States to use increased revenues resulting from such col-
lections to offset such cost shift and to design assistance
programs that address the special needs of immigrants en-
tering this country.
SEC. 744. AUTHORITY FOR COLLECTION OF SALES TAX.
(a) IN GENERAL.—A State is authorized to require
a person who is subject to the personal jurisdiction of the
State to collect and remit a State sales tax, a local sales
tax, or both, with respect to tangible personal property
if—
(1) the destination of the tangible personal
property is in the State,
(2) during the 1-year period ending on Septem-
ber 30 of the calendar year preceding the calendar
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year in which the taxable event occurs, the person
has gross receipts from sales of such tangible per-
sonal property—
(A) in the United States exceeding
$3,000,000, or
(B) in the State exceeding $100,000, and
(3) the State, on behalf of its local jurisdictions,
collects and administers all local sales taxes imposed
pursuant to this subtitle.
(b) STATES MUST COLLECT LOCAL SALES TAXES.—
A State in which both State and local sales taxes are im-
posed may not require State sales taxes to be collected
and remitted under subsection (a) unless the State also
requires the local sales taxes to be collected and remitted
under subsection (a).
(c) AGGREGATION RULES.—All persons that would
be treated as a single employer under section 52 (a) or
(b) of the Internal Revenue Code of 1986 shall be treated
as one person for purposes of subsection (a).
(d) DESTINATION.—For purposes of subsection (a),
the destination of tangible personal property is the State
or local jurisdiction which is the final location to which
the seller ships or delivers the property, or to which the
seller causes the property to be shipped or delivered, re-
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gardless of the means of shipment or delivery or the loca-
tion of the buyer.
SEC. 745. TREATMENT OF LOCAL SALES TAXES.
(a) UNIFORM LOCAL SALES TAXES.—
(1) IN GENERAL.—Sales taxes imposed by local
jurisdictions of a State shall be deemed to be uni-
form for purposes of this subtitle and shall be col-
lected under this subtitle in the same manner as
State sales taxes if—
(A) such local sales taxes are imposed at
the same rate and on identical transactions in
all geographic areas in the State, and
(B) such local sales taxes imposed on sales
by out-of-State persons are collected and ad-
ministered by the State.
(2) APPLICATION
TO
BORDER
JURISDICTION
TAX RATES.—A State shall not be treated as failing
to meet the requirements of paragraph (1)(A) if,
with respect to a local jurisdiction which borders on
another State, such State or local jurisdiction—
(A) either reduces or increases the local
sales tax in order to achieve a rate of tax equal
to that imposed by the bordering State on iden-
tical transactions, or
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(B) exempts from the tax transactions
which are exempt from tax in the bordering
State.
(b) NONUNIFORM LOCAL SALES TAXES.—
(1) IN GENERAL.—Nonuniform local sales taxes
required to be collected pursuant to this subtitle
shall be collected under one of the options provided
under paragraph (2).
(2) ELECTION.—For purposes of paragraph
(1), any person required under authority of this sub-
title to collect nonuniform local sales taxes shall
elect to collect either—
(A) all nonuniform local sales taxes appli-
cable to transactions in the State, or
(B) a fee (at the rate determined under
paragraph (3)) which shall be in lieu of the
nonuniform local sales taxes described in sub-
paragraph (A).
Such election shall require the person to use the
method elected for all transactions in the State while
the election is in effect.
(3) RATE OF IN-LIEU FEE.—For purposes of
paragraph (2)(B), the rate of the in-lieu fee for any
calendar year shall be an amount equal to the prod-
uct of—
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(A) the amount determined by dividing
total nonuniform local sales tax revenues col-
lected in the State for the most recently com-
pleted State fiscal year for which data is avail-
able by total State sales tax revenues for the
same year, and
(B) the State sales tax rate.
Such amount shall be rounded to the nearest 0.25
percent.
(4) NONUNIFORM LOCAL SALES TAXES.—For
purposes of this subtitle, nonuniform local sales
taxes are local sales taxes which do not meet the re-
quirements of subsection (a).
(c) DISTRIBUTION OF LOCAL SALES TAXES.—
(1) IN GENERAL.—A State shall distribute to
local jurisdictions a portion of the amounts collected
pursuant to this subtitle determined on the basis
of—
(A) in the case of uniform local sales taxes,
the proportion which each local jurisdiction re-
ceives of uniform local sales taxes not collected
pursuant to this subtitle,
(B) in the case of in-lieu fees, as described
in subsection (b)(2)(B), the proportion which
each local jurisdiction’s nonuniform local sales
142
tax receipts bears to the total nonuniform local
sales tax receipts in the State, and
(C) in the case of any nonuniform local
sales tax collected pursuant to this subtitle, the
geographical location of the transaction on
which the tax was imposed.
The amounts determined under subparagraphs (A)
and (B) shall be calculated on the basis of data for
the most recently completed State fiscal year for
which the data is available.
(2) TIMING.—Amounts described in paragraph
(1) (B) or (C) shall be distributed by a State to its
local jurisdictions in accordance with State time-
tables for distributing local sales taxes, but not less
frequently than every calendar quarter. Amounts de-
scribed in paragraph (1)(A) shall be distributed by
a State as provided under State law.
(3) TRANSITION RULE.—If, upon the effective
date of this subtitle, a State has a State law in ef-
fect providing a method for distributing local sales
taxes other than the method under this subsection,
then this subsection shall not apply to that State
until the 91st day following the adjournment sine
die of that State’s next regular legislative session
which convenes after the effective date of this sub-
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title (or such earlier date as State law may provide).
Local sales taxes collected pursuant to this subtitle
prior to the application of this subsection shall be
distributed as provided by State law.
SEC. 746. RETURN AND REMITTANCE REQUIREMENTS.
(a) IN GENERAL.—A State may not require any per-
son subject to this subtitle—
(1) to file a return reporting the amount of any
tax collected or required to be collected under this
subtitle, or to remit the receipts of such tax, more
frequently than once with respect to sales in a cal-
endar quarter, or
(2) to file the initial such return, or to make
the initial such remittance, before the 90th day after
the person’s first taxable transaction under this sub-
title.
(b) LOCAL TAXES.—The provisions of subsection (a)
shall also apply to any person required by a State acting
under authority of this subtitle to collect a local sales tax
or in-lieu fee.
SEC. 747. NONDISCRIMINATION AND EXEMPTIONS.
A State shall not have power under this subtitle to
require any person not located in the State or local juris-
diction to collect and remit a State or local sales tax if
a person located in the State or local jurisdiction would
144
have been exempt from or otherwise not subject to such
State or local sales tax under similar circumstances.
SEC. 748. APPLICATION OF STATE LAW.
(a) PERSONS REQUIRED TO COLLECT STATE OR
LOCAL SALES TAX.—Any person required by section 744
to collect a State or local sales tax shall be subject to the
laws of such State relating to such sales tax to the extent
that such laws are consistent with the limitations con-
tained in this subtitle.
(b) LIMITATIONS.—Except as provided in subsection
(a), nothing in this subtitle shall be construed to permit
a State—
(1) to license or regulate any person,
(2) to require any person to qualify to transact
intrastate business, or
(3) to subject any person to State taxes not re-
lated to the sales of tangible personnel property.
(c) PREEMPTION.—Except as otherwise provided in
this subtitle, this subtitle shall not be construed to pre-
empt or limit any power exercised 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. 749. TOLL-FREE INFORMATION SERVICE.
A State shall not have power under this subtitle to
require any person to collect a State or local sales tax on
145
any sale unless, at the time of such sale, such State has
a toll-free telephone service available to provide such per-
son information relating to collection of such State or local
sales tax. Such information shall include, at a minimum,
all applicable tax rates, return and remittance addresses
and deadlines, and penalty and interest information. As
part of the service, the State shall also provide all nec-
essary forms and instructions at no cost to any person
using the service. The State shall prominently display the
toll-free telephone number on all correspondence with any
person using the service. This service may be provided
jointly with other States.
SEC. 750. DEFINITIONS.
For the purposes of this subtitle—
(1) the term ‘‘compensating use tax’’ means a
tax imposed on or incident to the use, storage, con-
sumption, distribution, or other use within a State
or local jurisdiction or other area of a State, of tan-
gible personal property;
(2) the term ‘‘local sales tax’’ means a sales tax
imposed in a local jurisdiction or area of a State and
includes, but is not limited to—
(A) a sales tax or in-lieu fee imposed in a
local jurisdiction or area of a State by the State
on behalf of such jurisdiction or area, and
146
(B) a sales tax imposed by a local jurisdic-
tion or other State-authorized entity pursuant
to the authority of State law, local law, or both;
(3) the term ‘‘person’’ means an individual, a
trust, estate, partnership, society, association, com-
pany or corporation, including a limited liability
company, whether or not acting in a fiduciary or
representative capacity, and any combination of the
foregoing;
(4) the term ‘‘sales tax’’ means a tax, including
a compensating use tax, that is—
(A) imposed on or incident to the sale,
purchase, storage, consumption, distribution, or
other use of tangible personal property 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; and
(5) the term ‘‘State’’ means any of the several
States of the United States, the District of Colum-
bia, the Commonwealth of Puerto Rico, and any ter-
ritory or possession of the United States.
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SEC. 751. EFFECTIVE DATE.
This subtitle shall take effect 180 days after the date
of the enactment of this subtitle. In no event shall this
subtitle apply to any sale occurring before such effective
date.
TITLE VIII—EFFECTIVE DATE
SEC. 801. EFFECTIVE DATE.
Except as otherwise provided in this Act, this Act and
the amendments made by this Act shall take effect on Oc-
tober 1, 1996.
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