As reported, the US Senate on May 6 passed, by a vote of 69-27, the Marketplace Fairness Act of 2013, which provides that full member states of the Streamlined Sales and Use Tax Agreement and non-member states that meet certain minimum simplification requirements may require remote sales tax collection. The Senate also passed a perfecting amendment by a vote of 70-24.
S. 743 is identical to the original version of the bill, S. 336, introduced on February 2. The legislation grants remote seller collection authority to states that are full members of the Streamlined Sales and Use Tax Agreement (SSUTA). States that are not SSUTA members must enact minimum simplification requirements to receive remote seller collection authority, including the provision of a single entity within the state for administration, a single audit of a remote seller for all state and local jurisdictions, and a single sales and use tax return for remote sellers to file. Additional simplification requirements include the provision of: a uniform sales and use tax base among the state and the local taxing jurisdictions; taxability, exemption and rates and boundaries information for products and services; and free software to calculate sales taxes due and file returns, among other items. The legislation contains a small seller exception for remote sellers with gross annual receipts in nationwide total remote sales less than $1 million.
The Marketplace Fairness Act of 2013, in its current form, received significant bipartisan support before passing the Senate by a large margin. In the Senate, 56 amendments were submitted regarding various topics, including the moratorium on the taxation of Internet access and the taxation of digital products. However, the Senate agreed to vote only on a perfecting amendment, Senate Amendment 741.
SA 741’s conditional provision requiring that no additional SSUTA amendments be in conflict with minimum simplification requirements appears to ensure the SSUTA cannot be amended in the future to remove simplification provisions that would otherwise be required under the bill and still allow the collection authority. Other provisional changes in SA 741 address concerns regarding the timeframe, fairness and the utilization of software.
With the Senate passage, S. 743 now faces opposition in the US House of Representatives, with further amendments expected. For more information on the Marketplace Fairness Act, please click here.