Title: Stop Taxing Our Potential Act of 2018
Policy area: Taxation

Summary:
Stop Taxing Our Potential Act of 2018
This bill prohibits a state from imposing on a person obligations related to collecting or paying a sales tax, use tax, or similar tax unless the person had a physical presence in the state during the calendar quarter with respect to which the obligation is imposed.
A person is physically present if the person's business activities in the state include:
The bill specifies certain activities and agreements that indicate a de minimis physical presence that is excluded from the definition of "physical presence."
The bill also specifies that U.S. district courts have original jurisdiction over civil actions to enforce this bill.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 3180 Introduced in Senate (IS)]

<DOC>






115th CONGRESS
  2d Session
                                S. 3180

     To regulate certain State impositions on interstate commerce.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 28, 2018

  Mr. Tester (for himself, Mrs. Shaheen, Mr. Merkley, and Ms. Hassan) 
introduced the following bill; which was read twice and referred to the 
                          Committee on Finance

_______________________________________________________________________

                                 A BILL


 
     To regulate certain State impositions on interstate commerce.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Stop Taxing Our Potential Act of 
2018''.

SEC. 2. MINIMUM JURISDICTIONAL STANDARDS FOR STATE AND LOCAL SALES AND 
              USE TAX COLLECTION.

    (a) In General.--A State may not--
            (1) impose an obligation on a person for--
                    (A) the collection of a sales tax, use tax, or any 
                similar tax; or
                    (B) the reporting of any information with respect 
                to a tax described in subparagraph (A);
            (2) assess any tax described in paragraph (1)(A) on a 
        person; or
            (3) treat a person as doing business in a State for 
        purposes of any tax described in paragraph (1)(A),
unless such person had a physical presence in the State during the 
calendar quarter with respect to which such obligation or assessment is 
imposed.
    (b) Requirements for Physical Presence.--
            (1) In general.--For purposes of subsection (a), a person 
        has a physical presence in a State only if such person's 
        business activities in the State include any of the following 
        during the calendar quarter:
                    (A) Maintains its commercial or legal domicile in 
                the State.
                    (B) Owns, holds a leasehold interest in, or 
                maintains real property such as a retail store, 
                warehouse, distribution center, manufacturing 
                operation, or assembly facility in the State.
                    (C) Leases or owns tangible personal property 
                (other than computer software) of more than de minimis 
                value in the State.
                    (D) Has one or more employees, agents, or 
                independent contractors present in the State who 
                provide on-site design, installation, or repair 
                services on behalf of the remote seller.
                    (E) Has one or more employees, exclusive agents or 
                exclusive independent contractors present in the State 
                who engage in activities that substantially assist the 
                person to establish or maintain a market in the State.
                    (F) Maintains an office in the State at which it 
                regularly employs three or more employees for any 
                purpose.
            (2) De minimis physical presence.--For purposes of this 
        section, the term ``physical presence'' shall not include--
                    (A) entering into an agreement under which a 
                person, for a commission or other consideration, 
                directly or indirectly refers potential purchasers to a 
                person outside the State, whether by an Internet-based 
                link or platform, Internet Web site or otherwise;
                    (B) any presence in a State, as described in 
                section 2(b)(1), for less than 15 days in a taxable 
                year (or a greater number of days if provided by State 
                law);
                    (C) product placement, setup, or other services 
                offered in connection with delivery of products by an 
                interstate or in-State carrier or other service 
                provider;
                    (D) Internet advertising services provided by in-
                State residents which are not exclusively directed 
                towards, or do not solicit exclusively, in-State 
                customers;
                    (E) ownership by a person outside the State of an 
                interest in a limited liability company or similar 
                entity organized or with a physical presence in the 
                State;
                    (F) the furnishing of information to customers or 
                affiliates in such State, or the coverage of events or 
                other gathering of information in such State by such 
                person, or his representative, which information is 
                used or disseminated from a point outside the State; or
                    (G) business activities directly relating to such 
                person's potential or actual purchase of goods or 
                services within the State if the final decision to 
                purchase is made outside the State.
    (c) Protection of Non-Sellers.--A State may not impose or assess a 
sales, use, or similar tax on a person or impose an obligation to 
collect or report any information with respect thereto, unless such 
person is either a purchaser or a seller having a physical presence in 
the State.

SEC. 3. DISPUTE RESOLUTION.

    The district courts of the United States shall have original 
jurisdiction over civil actions to enforce the provisions of this Act, 
including authority to issue declaratory judgments pursuant to section 
2201 of title 28, United States Code, and, notwithstanding the 
provisions of section 1341 of such title, injunctive relief, as 
necessary to carry out any provision of this Act.

SEC. 4. DEFINITIONS AND EFFECTIVE DATE.

    (a) Definitions.--For purposes of this Act:
            (1) Marketplace provider.--The term ``marketplace 
        provider'' includes any person, other than a seller, who 
        facilitates a sale. For purposes of this subsection, a person 
        facilitates a sale when the person both--
                    (A) lists or advertises products for sale in any 
                forum, including a catalog or Internet Web site; and
                    (B) either directly or indirectly through 
                agreements or arrangements with third parties, collects 
                gross receipts from the customer and transmits those 
                receipts to the marketplace seller, whether or not such 
                person deducts any fees or other amounts from those 
                receipts prior to transferring them to the marketplace 
                seller.
            (2) Marketplace seller.--The term ``marketplace seller'' 
        means a person that has any sales facilitated by a marketplace 
        provider.
            (3) Person.--The term ``person'' has the meaning given such 
        term by section 1 of title 1, United States Code. Each 
        corporation that is a member of a group of affiliated 
        corporations, whether unitary or not, is itself a separate 
        person.
            (4) Product.--The term ``product'' includes any good or 
        service, tangible or intangible.
            (5) Referrer.--The term ``referrer'' shall mean every 
        person who--
                    (A) contracts or otherwise agrees with a seller to 
                list multiple products for sale and the sales prices 
                thereof in any forum, including a catalog or Internet 
                Web site;
                    (B) receives a fee, commission, or other 
                consideration from a seller for the listing;
                    (C) transfers, via telephone, Internet link, or 
                otherwise, a customer to the seller or the seller's Web 
                site to complete a purchase; and
                    (D) does not collect receipts from the customer for 
                the transaction.
            (6) Seller.--The term ``seller'' does not include--
                    (A) any marketplace provider (except with respect 
                to the sale through the marketplace of products owned 
                by the marketplace provider);
                    (B) any referrer;
                    (C) any carrier, in which the seller does not have 
                an ownership interest, providing transportation or 
                delivery services with respect to tangible personal 
                property; and
                    (D) any credit card issuer, transaction or billing 
                processor, or other financial intermediary.
            (7) Similar tax.--The term ``similar tax'' means a tax that 
        is imposed with respect to the sale or use of a product, 
        regardless of whether the tax is imposed on the person making 
        the sale or the purchaser, with the right or obligation of the 
        person making the sale to obtain reimbursement for the amount 
        of the tax from the purchaser at the time of the transaction.
            (8) State.--The term ``State'' means the several States, 
        the District of Columbia, the Commonwealth of Puerto Rico, 
        Guam, American Samoa, the United States Virgin Islands, the 
        Commonwealth of the Northern Mariana Islands, and any other 
        territory or possession of the United States and includes any 
        political subdivision thereof.
    (b) Effective Date.--This Act shall apply with respect to calendar 
quarters beginning on or after January 1, 2019.
                                 <all>