Sen. Michael Enzi (R-WY) wants to level the playing field for all in-store, catalog, and online retailers so each has the same sales tax responsibilities.
Sen. Michael Enzi
On May 22, Enzi introduced in the Senate the "Sales Tax Fairness and Simplification Act," which seeks to help states "efficiently and fairly" collect sales and use tax revenue that is being lost because remote sellers do not have to remit sales and use taxes on catalog and Internet purchases. In a statement, Enzi noted that, because many online and catalog retailers are exempt from collecting the same taxes that Main Street retailers do, states and localities are losing "billions in lost revenue."
"Simply put, if Congress continues to allow remote sales taxes to go uncollected and electronic commerce continues to grow as predicted, other taxes, such as income or property taxes, will have to be increased to offset the lost revenue to state and local governments. I want to avoid that," said Enzi. He stressed that his bill would not increase taxes or allow duplicate taxes by different states, and would encourage tax simplification by requiring states to implement and maintain measures before they can require any remote seller to collect and remit sales and use taxes.
The legislation would streamline the country's more than 7,500 diverse sales tax jurisdictions by permitting states that become voluntary members of the Streamlined Sales and Use Tax Agreement to require remote sellers to collect and remit sales and use taxes. A total of 15 states have permanently changed their tax laws and implemented the requirements of the agreement. The agreement would help harmonize states sales and use tax rules, bring uniformity to the definitions of items in the sales tax base, reduce the paperwork burden on retailers, and incorporate new technology to modernize administrative procedures.
Enzi's bill includes a provision that would allow remote sellers that have less than $5 million in sales nationwide in the preceding year to qualify for an exemption. In addition, "after spending the last year talking with all stake holders," Enzi explained, the bill now includes a provision that would allow tribal governments to participate in the streamline sales tax system. Tribes would have to meet the same standards and requirements as a state and would also be allowed a seat on the Governing Board.
"The states have acted. It is now time for Congress to provide states that enact the Streamlined Sales and Use Tax Agreement with the authority to require remote retailers to collect sales tax just as Main Street retailers do today," Enzi said.
The bill has been referred to the Senate Finance Committee. The text of the legislation can be accessed at enzi.senate.gov.