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Main Street – Internet Sales Tax Legislation


 

Tax Analysts reports that “With the growing momentum on Capitol Hill to address the online sales tax collection issue, the Streamlined Sales Tax Governing Board (SSTGB) is drafting implementation plans for how states would handle working with remote sellers.”

At a recent National Conference of State Legislatures’ Executive Committee Task Force on State and Local Taxation of Communications and Electronic Commerce meeting, a number of concerns were raised. Scott Peterson, SSTGB executive director, indicated that in-state retailers who are expected to collect sales tax on transactions made over the Internet to residents of other states “…aren’t going to call the Wyoming Department of Revenue when they have to collect the Wyoming sales tax.”

Other concerns included:

  • “The communication really needs to be clear so the taxpayers understand what they need to do.” Russ Brubaker, senior assistant director of tax policy for the Washington Department of revenue and SSTGB President.
  • “How is our [Department of Revenue Administration] going to understand what’s going on if they’re not part of it? Who will give them that information?” New Hampshire State Representative Norman Major. New Hampshire is a non-streamlined state with no sales tax.
  • “H.R. 3179 would not address all of the business community’s complexity concerns.”
  • “S. 1832 fails to guarantee that the streamlined agreement will not water down its simplification standards.”
  • The streamlined agreement will not ensure sales tax simplification for ecommerce businesses.

Tax Analysts mentioned that two other remote sales tax bills may be proposed this season. “One is a proposal advocated by Overstock.com, which would require states to offer sales tax collection software, a single point of collection, and a uniform sales tax base. Another currently unnamed bill would require similar simplifications, as well as establishing a small-seller exception of $1 million in annual remote sales and a single blended rate for states with local taxing jurisdictions.”

Each of these have pieces that are included in bills already proposed. The Main Street Fairness bill (S. 1452/H.R. 2701) proposes all states who are members of the Streamlined Sales and Use Tax Agreement (SSUTA) are allowed to impose sales tax collection obligations on remote sellers. The Marketplace Equity bill (H.R.3179) and the Marketplace Fairness bill (S. 1832) both provide for small seller exemption up to $500,000.

All of them call for some kind of simplified reporting or have a provision for sales tax software to be made available to internet retailers.


Avalara Author
Susan McLain
Avalara Author Susan McLain
Susan McLain began her career as a technical writer in technology industries such as satellite networking and medical devices. Her skills encompass technical and marketing writing, usability engineering, verification and validation testing and protocol writing, requirements development, business analysis, technical illustration/graphic design and marketing. She has owned her own business providing service to small to medium sized business and in other positions, she has been in project management, documentation and marketing. She is currently the content specialist for Avalara helping to “make sales tax less taxing.”