‘‘(J) State administration of all State and
local use taxes on sales by sellers that are not
physically present in a State, to purchasers that
are physically present in such State, with dis-
tribution of revenues to political subdivisions of
such State according to precedent and applica-
ble State law;
‘‘(K) uniform audit procedures;
‘‘(L) reasonable compensation for such
sellers that reflects the complexity of the tax
structure of such State (including the tax struc-
tures of political subdivisions of such State);
and
‘‘(M) an appropriate sales volume thresh-
old below which such sellers that are small busi-
nesses would not be required to collect use
taxes payable on sales to purchasers that are
physically present in such State.
‘‘SEC. 1105. INTERSTATE SALES AND USE TAX COMPACT.
‘‘(a) AUTHORIZATION
AND CONSENT.—States are
authorized to enter into an Interstate Sales and Use Tax
Compact, and Congress hereby consents to such a com-
pact. The Compact shall provide that member States agree
to adopt a uniform, streamlined uniform sales and use tax
system consistent with section 1104(a).
‘‘(b) EXPIRATION.—The authorization and consent in
subsection (a) shall automatically expire if the Compact
has not been formed before January 1, 2004.
‘‘(c) COMPLIANCE.—The streamlined uniform sales
and use tax system prescribed by the Compact as provided
in subsection (a) shall be evaluated against the require-
ments of section 1104(a) in a report submitted to Con-
gress in a timely fashion by the Secretary of the Treasury
who shall certify whether such a system has met the re-
quirements in section 1104(a).
‘‘SEC. 1106. AUTHORIZATION TO SIMPLIFY STATE USE TAX
RATES.
‘‘Notwithstanding any other provision of law, any
State levying a sales tax is authorized to administer a sin-
gle uniform statewide use tax rate relating to all remote
sales (as defined in section 1107 of this title) on which
it assesses a use tax, provided that for each calendar year
in which such statewide rate is applicable, if such rate had
been assessed during the second calendar year prior to
such year on all such sales on which a sales tax was as-
sessed by such State or its local jurisdictions, the total
taxes assessed on such sales would not have exceeded the
total taxes actually assessed on such sales during such
year. A State may use a blended rate that reflects the
weighted average of State and local taxes across such
State.
‘‘SEC. 1107. AUTHORIZATION TO REQUIRE COLLECTION OF
USE TAXES.
‘‘(a) GRANT OF AUTHORITY.—(1) A State that has
adopted the streamlined uniform system prescribed by the
Compact referred to in section 1105 of this title is author-
ized to begin collecting use taxes on remote sales by Janu-
ary 1, 2004, or by the date of adoption of the Compact,
whichever is earlier.
‘‘(2) Paragraph (1) shall not apply to a State that
does not choose to simplify its tax collection system.
‘‘(3) A State that neither simplifies its sales and use
tax system nor meets the criteria spectified in section
1104, by December 31, 2001, may adopt the streamlined
uniform system prescribed by the Compact and begin col-
lecting use taxes on remote sales with any succeeding cal-
endar year by meeting such criteria.
‘‘(b) NO EFFECT ON NEXUS.—No obligation imposed
by virtue of authority granted in subsection (a) shall be
considered in determining whether a seller has a nexus
with any State for any tax purpose.
‘‘(c) DEFINITION OF REMOTE SALE.—For purposes
of this section, the term ‘remote sale’ means a sale by a
seller that is not physically present in a State, to a pur-
chaser that is physically present in such State.
‘‘SEC. 1108. LIMITATIONS.
‘‘Nothing in this Act shall be construed as subjecting
sellers to sales taxes, franchise taxes, income taxes, or li-
censing requirements of a State or political subdivision
thereof, nor shall anything in this Act be construed as af-
fecting the application of such taxes or requirements or
enlarging or reducing the authority of any State or polit-
ical subdivision to impose such taxes or requirements.’’.
SEC. 3. SENSE OF THE CONGRESS REGARDING STATE AND
LOCAL TELECOMMUNICATIONS TAXES.
It is the sense of the Congress that States and polit-
ical subdivisions of States should continue to work coop-
eratively with the telecommunications industry and other
relevant groups—
(1) to dramatically reduce the complexity and
cost of complying with State and local telecommuni-
cations taxes;
(2) to create more uniform telecommunication
State tax laws that include the adoption of common
definitions and sourcing rules; and
(3) to address taxes that appear to be discrimi-
natory toward the telecommunications industry.
SEC. 4. CONFORMING AMENDMENTS.
(a) CROSS REFERENCE
IN
THE TRADE ACT
OF
1974.—Section 181(d) of the Trade Act of 1974 (19
U.S.C. 2241(d)) is amended by striking ‘‘section 1104(3)’’
and inserting ‘‘1109(3)’’.
(b) OTHER CROSS REFERENCE.—Section 1203(c) of
division C of Public Law 105–277 (112 Stat. 2681–727;
19 U.S.C. 2241 note) by striking ‘‘section 1104(3)’’ and
inserting ‘‘1109(3)’’.
Æ