Online Tax e-Fairness Bill Introduced in the House

On Thursday, September 25, Representatives Ernest Istook (R-OK) and William Delahunt (D-MA) introduced legislation into the U.S. House of Representatives that would allow states to simplify sales tax, with equal tax treatment between local merchants and remote sellers. It is also expected that Senators Byron Dorgan (D-ND) and Michael Enzi (R-WY) will introduce a similar bill into the Senate next week.

The new bill, H.R. 3184, the Streamlined Sales and Use Tax Agreement (SSUTA), was applauded by the e-Fairness Coalition, which is composed of bricks-and-mortar retailers, retail associations, and other organizations -- including ABA -- that believe the proposed legislation will provide for a more efficient, pro-business environment. "[We] hope that Congress will act quickly to give it's blessing," said Tripp Funderburk, policy advisor to the e-Fairness Coalition.

SSUTA will grant authority to a national simplification agreement already made last year between 34 states and the District of Columbia, which was also called SSUTA. The states' agreement outlined a comprehensive system to simplify the states' sales tax rules and dramatically reduce red tape for America's businesses. Since it was adopted last year, 20 states enacted legislation to change their tax laws and implement the requirements of that agreement.

Under the federal bill, the states would be permitted to enforce sales tax laws on merchants who ship goods into their state, and who have over $5 million in annual gross remote national sales. The legislation also requires states to compensate retailers for their costs in collecting sales taxes, including costs of computer software.

At press time, it was reported that Amazon.com was considering joining the ranks of those supporting the bill, providing that it specify that retailers with sales of $25,000 or more be required to collect sales tax for out-of-state sales.

"This all about making more decisions at the state and local levels, not in Washington," Rep. Istook said.

"Each state and community should be free to make their own decisions, rather than having everyone follow orders and depend on money from Washington…. Earlier this year, we saw $20 billion flow out of the federal Treasury to help states meet revenue shortfalls. This legislation should help avoid a repeat of that spending. The best way to stop efforts to raise taxes is to control spending and to collect the existing taxes more fairly." --David Grogan [1]