Wednesday, June 17, 2015

Lawmakers introduce Bipartisan Remote Sales Tax Legislation

WASHINGTON – One June 16, 2015, House Judiciary Committee Ranking Member John Conyers, Jr. (D-MI), Congressman Jason Chaffetz (R-UT) and a group of bipartisan lawmakers introduced H.R. 2775, the Remote Transactions Parity Act (RTPA), a bill that will modernize our nation’s outdated sales tax collection process.  The legislation, which will be referred to the House Judiciary Committee because of its jurisdiction over state taxes affecting interstate commercewill strengthen states’ authorities and bring sales tax parity to e-retailers and brick-and-mortar stores.

Dean of the U.S. House
of Representatives
John Conyers, Jr.
Each year, more and more Americans are turning to the Internet to purchase goods and services. While this development has been a boon for certain industries, state and local governments have been increasingly deprived of critical revenue as a result of lost taxes that consumers are not required to pay under the current system,” said Rep. John Conyers.  “Lost tax revenues mean that state and local governments will likely provide their citizens with fewer services, like education, law enforcement, and social services. The Remote Transactions Parity Act represents a bipartisan effort that incorporates the best aspects of these prior measures in a fair and equitable manner and has broad support from the business community, and state and local governments.  I look forward to working with my colleagues across the aisle to turn this bill into law.”

The current tax loophole skews the free market.  It allows businesses to avoid collecting sales taxes.  This not only forces more brick-and-mortar stores to close their doors and lay off their employees, but also requires consumers to shoulder the burden and liability of the sales tax themselves - taxes that the consumer is by current law required to compute and pay as a part of their yearly taxes.  The RTPA would close this loophole in a way that is generous to small remote sellers and puts our neighborhood retailers on a level playing field - without completely changing our current state sales and use tax structure.

RTPA includes significant audit protections for small businesses – and, except in the case of intentional misrepresentation or fraud, exempts businesses under $5 million in gross receipts from remote state audits entirely.

Additionally, this legislation also exempts from collection requirements in the first year small businesses under $10 million, phasing to $5 million in the second year and $1 million in the third.

Finally, the RTPA calls for states to give remote sellers the software needed to collect and remit the taxes due.  It also requires states to pay for set-up, installation, and maintenance costs on the software.

Additional cosponsors include Reps. Steve Womack (R-AR), Jackie Speier (D-CA), Kristi Noem (R-SD), Peter Welch (D-VT), Steve Stivers (R-OH), Suzan Delbene (D-WA), Lou Barletta (R-PA), Ted Deutch (D-PA), Scott Rigell (R-VA), John Larson (D-CT),  Renee Ellmers (R-NC), Derek Kilmer (D-WA), Carlos Curbelo (R-FL), Hank Johnson (D-GA), and Robert Dold (R-IL).
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