Expresses the sense of Congress that: (1) States and localities should work together to develop a uniform streamlined sales and use tax system that addresses remote sales; and (2) a joint comprehensive study should be undertaken to determine the cost of collecting and remitting State and local sales and use taxes under such system.
Authorizes States to enter into an Interstate Sales and Use Tax Compact which shall describe a uniform, streamlined sales and use tax system consistent with such system.
[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1410 Introduced in House (IH)]
107th CONGRESS
1st Session
H. R. 1410
To foster innovation and technological advancement in the development
of the Internet and electronic commerce, and to assist the States in
simplifying their sales and use taxes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 4, 2001
Mr. Istook (for himself, Mr. Delahunt, Mr. Bachus, Mr. Capuano, Mr.
Conyers, Mr. Hutchinson, Mr. Foley, Mr. Frost, Mr. Isakson, Mr. Gordon,
Mr. LaHood, and Mr. Matsui) introduced the following bill; which was
referred to the Committee on the Judiciary
_______________________________________________________________________
A BILL
To foster innovation and technological advancement in the development
of the Internet and electronic commerce, and to assist the States in
simplifying their sales and use taxes.
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 ``Internet Tax Moratorium and Equity
Act''.
SEC. 2. FINDINGS.
Congress makes the following findings:
(1) The moratorium of the Internet Tax Freedom Act on new
taxes on Internet access and on multiple and discriminatory
taxes on electronic commerce should be extended.
(2) States should be encouraged to simplify their sales and
use tax systems.
(3) As a matter of economic policy and basic fairness,
similar sales transactions should be treated equally, without
regard to the manner in which sales are transacted, whether in
person, through the mails, over the telephone, on the Internet,
or by other means.
(4) Congress may facilitate such equal taxation consistent
with the United States Supreme Court's decision in Quill Corp.
v. North Dakota.
(5) States that adequately simplify their tax systems
should be authorized to correct the present inequities in
taxation through requiring sellers to collect taxes on sales of
goods or services delivered in-state, without regard to the
location of the seller.
(6) The States have experience, expertise, and a vital
interest in the collection of sales and use taxes, and thus
should take the lead in developing and implementing sales and
use tax collection systems that are fair, efficient, and non-
discriminatory in their application and that will simplify the
process for both sellers and buyers.
(7) Online consumer privacy is of paramount importance to
the growth of electronic commerce and must be protected.
SEC. 3. EXTENSION OF INTERNET TAX FREEDOM ACT MORATORIUM THROUGH 2005.
Section 1101(a) of the Internet Tax Freedom Act (47 U.S.C. 151
note) is amended by striking ``3 years after the date of the enactment
of this Act--'' and inserting ``on December 31, 2005:''.
SEC. 4. STREAMLINED SALES AND USE TAX SYSTEM.
(a) Development of Streamlined System.--It is the sense of Congress
that States and localities should work together to develop a
streamlined sales and use tax system that addresses the following in
the context of remote sales:
(1) A centralized, one-stop, multi-state registration
system for sellers.
(2) Uniform definitions for goods or services, the sale of
which may, by State action, be included in the tax base.
(3) Uniform rules for attributing transactions to
particular taxing jurisdictions.
(4) Uniform procedures for--
(A) the treatment of purchasers exempt from sales
and use taxes; and
(B) relief from liability for sellers that rely on
such State procedures.
(5) Uniform procedures for the certification of software
that sellers rely on to determine sales and use tax rates and
taxability.
(6) A uniform format for tax returns and remittance forms.
(7) Consistent electronic filing and remittance methods.
(8) State administration of all State and local sales and
use taxes.
(9) Uniform audit procedures, including a provision giving
a seller the option to be subject to no more than a single
audit per year using those procedures; except that if the
seller does not comply with the procedures to elect a single
audit, any State can conduct an audit using those procedures.
(10) Reasonable compensation for tax collection by sellers.
(11) Exemption from use tax collection requirements for
remote sellers falling below a de minimis threshold of
$5,000,000 in gross annual sales.
(12) Appropriate protections for consumer privacy.
(13) Such other features that the States deem warranted to
promote simplicity, uniformity, neutrality, efficiency, and
fairness.
(b) No Undue Burden.--Congress finds that, if adopted, the system
described in subsection (a) will not place an undue burden on
interstate commerce or burden the growth of electronic commerce and
related technologies in any material way.
(c) Study.--It is the sense of Congress that a joint, comprehensive
study should be commissioned by State and local governments and the
business community to determine the cost to all sellers of collecting
and remitting State and local sales and use taxes on sales made by
sellers under the law as in effect on the date of enactment of this Act
and under the system described in subsection (a) to assist in
determining what constitutes reasonable compensation.
SEC. 5. INTERSTATE SALES AND USE TAX COMPACT.
(a) Authorization and Consent.--In general, the States are
authorized to enter into an Interstate Sales and Use Tax Compact.
Subject to subsection (c), Congress consents to their entry into that
Compact. The Compact shall describe a uniform, streamlined sales and
use tax system consistent with section 4(a), and shall provide that
States joining the Compact must adopt that system.
(b) Expiration.--The authorization and consent in subsection (a)
shall expire if the Compact has not been formed before January 1, 2006.
(c) Congressional Consent Withdrawn if Compact Disapproved.--
(1) Adopting states to transmit.--Upon the 20th State
becoming a signatory to the Compact, the adopting States shall
transmit a copy of the Compact to Congress.
(2) Congressional action.--The consent of Congress to the
Compact is withdrawn if Congress, by law, disapproves the
Compact within 120 days (computed in accordance with section
154 of the Trade Act of 1974 (19 U.S.C. 2194)) after the
adopting States transmit the Compact to Congress.
SEC. 6. AUTHORIZATION TO SIMPLIFY STATE USE-TAX RATES THROUGH
AVERAGING.
(a) In General.--Subject to the exception in subsection (e), a
State that adopts the Compact authorized under section 5 and that
levies a use tax shall impose a single, uniform State-wide use-tax rate
on all remote sales on which it assesses a use tax for any calendar
year for which the State meets the requirements of subsection (b).
(b) Averaging Requirement.--A State meets the requirements of this
subsection for any calendar year in which the single, uniform State-
wide use-tax rate is in effect if such rate is no greater than the
weighted average of the sales tax rates actually imposed by the State
and its local jurisdictions during the 12-month period ending on June
30 prior to such calendar year.
(c) Computation of Rate No Greater Than Weighted Average.--For
purposes of subsection (b), a State-wide use-tax rate is no greater
than the weighted average of the sales tax rates imposed during a 12-
month period described in subsection (b) only if, had such rate been
assessed during such period on all sales subject to the sales and use
tax by such State and its local jurisdictions, such rate would not have
yielded a greater total assessment of taxes than the total taxes
actually assessed on such sales during such period.
(d) Annual Option To Collect Actual Tax.--Notwithstanding
subsection (a), a remote seller may elect annually to collect the
actual applicable State and local use taxes on each sale made in the
State.
(e) Alternative System.--A State that adopts the dramatically
simplified sales and use tax system described in the Compact authorized
under section 5 so that remote sellers can use information provided by
the State to identify the single applicable rate for each sale, may
require a remote seller to collect the actual applicable State and
local sales or use tax due on each sale made in the State if the State
provides such seller relief from liability to the State for relying on
such information provided by the State.
SEC. 7. AUTHORIZATION TO REQUIRE COLLECTION OF USE TAXES.
(a) Grant of Authority.--
(1) States that adopt the system may require collection.--
Any State that has adopted the system described in the Compact
is authorized, notwithstanding any other provision of law, to
require all sellers not qualifying for the de minimis exception
to collect and remit sales and use taxes on remote sales to
purchasers located in such State after the expiration of the
120 day period described by section 5(c)(2) unless the Compact
is disapproved under section 5(c).
(2) States that do not adopt the system may not require
collection.--Paragraph (1) does not extend to any State that
does not adopt the system described in the Compact.
(b) No Effect on Nexus, etc.--No obligation imposed by virtue of
authority granted by subsection (a)(1) or denied by subsection (a)(2)
shall be considered in determining whether a seller has a nexus with
any State for any other tax purpose. Except as provided in subsection
(a), nothing in this Act permits or prohibits 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 related to the
sale of goods or services.
SEC. 8. LIMITATION.
In general, nothing in this Act shall be construed as subjecting
sellers to franchise taxes, income taxes, or licensing requirements of
a State or political subdivision thereof, nor shall anything in this
Act be construed as affecting the application of such taxes or
requirements or enlarging or reducing the authority of any State or
political subdivision to impose such taxes or requirements.
SEC. 9. DEFINITIONS.
In this Act:
(1) State.--The term ``State'' means any State of the
United States of America and includes the District of Columbia.
(2) Goods or services.--The term ``goods or services''
includes tangible and intangible personal property and
services.
(3) Remote sale.--The term ``remote sale'' means a sale in
interstate commerce of goods or services attributed, under the
rules established pursuant to section 4(a)(3), to a particular
taxing jurisdiction that could not, except for the authority
granted by this Act, require that the seller of such goods or
services collect and remit sales or use taxes on such sale.
(4) Locus of remote sale.--The term ``particular taxing
jurisdiction'', when used with respect to the location of a
remote sale, means a remote sale of goods or services
attributed, under the rules established pursuant to section
4(a)(3), to a particular taxing jurisdiction.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on the Judiciary.
Referred to the Subcommittee on Commercial and Administrative Law.
Subcommittee Hearings Held.
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