Online Sales Simplicity and Small Business Relief Act of 2019

II 116TH CONGRESS 1ST SESSION S. 2350 To prohibit States from retroactively imposing a sales tax collection duty on a remote seller, and for other purposes. IN THE SENATE OF THE UNITED STATES JULY 31, 2019 Mrs. SHAHEEN (for herself, Mr. WYDEN, Ms. HASSAN, and Mr. MERKLEY) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To prohibit States from retroactively imposing a sales tax collection duty on a remote seller, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Online Sales Simplicity 4 and Small Business Relief Act of 2019’’. 5 SEC. 2. BAN ON RETROACTIVE TAXATION OF INTERNET 6 COMMERCE. 7 A State may not impose a sales tax collection duty 8 on a remote seller for any sale that occurred prior to June 9 21, 2018. 10 VerDate Sep 11 2014 00:54 Aug 08, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S2350.IS S2350 kjohnson on DSK79L0C42 with BILLS 2 •S 2350 IS SEC. 3. ORDERLY PHASE-IN OF COMPLIANCE OBLIGATIONS. 1 A State may impose a sales tax collection duty on 2 a remote seller only for a sale that occurs after January 3 1, 2021. 4 SEC. 4. SMALL BUSINESS REMOTE SELLER EXEMPTION. 5 In the case of a sale made by a small business remote 6 seller, no State may impose a sales tax collection duty on 7 any person other than the purchaser if the sale is made 8 on or after June 21, 2018, and before the date that is 9 30 days after the date on which the States develop and 10 Congress approves an interstate compact, applicable to the 11 State and sale, governing the imposition of tax collection 12 duties on remote sellers. 13 SEC. 5. SENSE OF CONGRESS. 14 It is the sense of Congress that the States should de- 15 velop an interstate compact for the collection of sales tax 16 by remote sellers that identifies a clearly defined minimum 17 substantial nexus between the remote seller and the taxing 18 State, that simplifies registration, collection, remittance, 19 auditing, and other compliance processes to the greatest 20 extent possible in order to avoid undue burdens on inter- 21 state commerce, and that, due to such simplification, 22 eliminates the need for the continuation of the small busi- 23 ness remote seller exemption under section 4. 24 SEC. 6. DEFINITIONS. 25 In this Act: 26 VerDate Sep 11 2014 00:54 Aug 08, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S2350.IS S2350 kjohnson on DSK79L0C42 with BILLS 3 •S 2350 IS (1) REMOTE SELLER.—The term ‘‘remote sell- 1 er’’ means a person without a physical presence in 2 the State who makes a sale in the State. 3 (2) PHYSICAL PRESENCE.— 4 (A) IN GENERAL.—Except as provided in 5 subparagraph (B), the term ‘‘physical presence’’ 6 means, with respect to a person, that a person’s 7 business activities in the State include any of 8 the following during such person’s taxable year: 9 (i) Being an individual physically in 10 the State, or assigning one or more em- 11 ployees to be in the State. 12 (ii) Using the services of an agent (ex- 13 cluding an employee) to establish or main- 14 tain a market in the State, if such agent 15 does not perform business services in the 16 State for any other person during such 17 taxable year. 18 (iii) The leasing or owning of tangible 19 personal property (other than digital or al- 20 phanumeric data) or of real property in the 21 State. 22 (B) EXCEPTION.—A person does not have 23 physical presence in a State if the person’s 24 physical presence in the State under subpara- 25 VerDate Sep 11 2014 00:54 Aug 08, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2350.IS S2350 kjohnson on DSK79L0C42 with BILLS 4 •S 2350 IS graph (A) was for less than 15 days in a tax- 1 able year (or a greater number of days if pro- 2 vided by State law), or if the person’s physical 3 presence in the State was solely for the purpose 4 of conducting limited or transient business ac- 5 tivity. 6 (3) SALES TAX COLLECTION DUTY.—The term 7 ‘‘sales tax collection duty’’ means— 8 (A) an obligation imposed on a person, in- 9 cluding a person other than the actual seller, 10 to— 11 (i) pay or collect a sales, use, or simi- 12 lar tax upon the sale of a good or service; 13 or 14 (ii) report any information with re- 15 spect to such sale of a good or service; or 16 (B) the assessment of a sales, use, or simi- 17 lar tax on a person. 18 (4) SMALL BUSINESS REMOTE SELLER.—The 19 term ‘‘small business remote seller’’ means a remote 20 seller with gross annual receipts in the United 21 States during the preceding calendar year in an 22 amount that is not more than $10,000,000. 23 Æ VerDate Sep 11 2014 00:54 Aug 08, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6301 E:\BILLS\S2350.IS S2350 kjohnson on DSK79L0C42 with BILLS