On Thursday, September 25, Representatives Ernest Istook (R-OK) and William Delahunt (D-MA) introduced legislation in the U.S. House of Representatives that would allow states to simplify sales tax, with equal tax treatment between local merchants and remote sellers.
The new bill, H.R. 3184, the Streamlined Sales and Use Tax Agreement (SSUTA), would grant authority to a national simplification agreement already made last year by 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 to dramatically reduce red tape for America's businesses. Under the federal bill, the states would be permitted to enforce sa les 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.
Congressman Istook told Bookselling This Week via e-mail that he and Congressman Delahunt decided to tackle this issue and introduce legislation because "resolving this issue has been a problem for a long time. The Supreme Court decision regarding remote sales required simplification of the sales tax system to ensure businesses were not overly burdened with the current patchwork quilt of over 7,500 separate sales tax jurisdictions. The idea is to make sure that we have fair and honest enforcement of the taxes we have right now, before adding any new taxes."
Istook stressed that, if Congress fails to act and allows states' revenue sources to erode, then states will l ook to Washington for the funds they need for essential services like police, fire, and schools. "That shifts more power to Washington, and we don't need that," he said. SSUTA will help retailers because "it simplifies the system &q uot; by allowing retailers to "report to one place in the whole country, rather than dealing with each separate state."
At present, H.R. 3184 has the support of "a very strong coalition," which includes retailers s uch as Wal-Mart, Staples, and Circuit City, and the bill applies simply to companies that sell more than $5 million a year. Senators Byron Dorgan (D-ND) and Michael Enzi (R-WY) are hoping to introduce a similar bill into the Senate sometime after the Senate reconvenes on October 14. Dorgan and Enzi had initially planned to introduce the bill earlier but are now hoping to garner the support of retailers including Amazon.com, which is against the $5 million exemption, as reported by the Washington Post. (For an interview with Senator Enzi, click here.)
Istook told BTW that they hope to have a vote on the House floor sometime next year. --David Grogan