text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Marketplace Fairness Act''.
  
  SEC. 2. SENSE OF CONGRESS.
  
      It is the sense of Congress that States should have the ability to 
  enforce their existing sales and use tax laws and to treat similar 
  sales transactions equally, without regard to the manner in which the 
  sale is transacted,   and the right to collect--or decide not to 
  collect--taxes that are already owed under State law.
  
  SEC. 3. AUTHORIZATION TO REQUIRE COLLECTION OF SALES AND USE TAXES.
  
      (a) Streamlined Sales and Use Tax Agreement.--Each Member State 
  under the Streamlined Sales and Use Tax Agreement is authorized to 
  require all sellers not qualifying for a small seller exception to 
  collect and remit sales and use taxes with respect to remote sales 
  sourced to that Member State pursuant to the provisions of the 
  Streamlined Sales and Use Tax Agreement. Such authority shall commence 
  beginning no earlier than the first day of the calendar quarter that is 
  at least 90 days after the date of the enactment of this Act.
      (b) Alternative.--
              (1) In general.--A State that is not a Member State under 
          the Streamlined Sales and Use Tax Agreement is authorized to 
          require all sellers not qualifying for the small seller 
          exception to collect and remit sales and use taxes with respect 
          to remote sales sourced to that State, but only if the State 
          adopts and implements minimum simplification requirements. Such 
          authority shall commence beginning no earlier than the first 
          day of the calendar quarter that is at least 6 months after the 
          date that the State enacts legislation to implement each of the 
          following minimum simplification requirements:
                      (A) Provide--
                              (i) a single State-level agency to 
                          administer all sales and use tax laws, 
                          including the collection and administration of 
                          all State and applicable locality sales and use 
                          taxes for all sales sourced to the State made 
                          by remote sellers,
                              (ii) a single audit for all State and local 
                          taxing jurisdictions within that State, and
                              (iii) a single sales and use tax return to 
                          be used by remote sellers and single and 
                          consolidated providers and to be filed with the 
                          State-level agency.
                      (B) Provide a uniform sales and use tax base among 
                  the State and the local taxing jurisdictions within the 
                  State.
                      (C) Require remote sellers and single and 
                  consolidated providers to collect sales and use taxes 
                  pursuant to the applicable destination rate, which is 
                  the sum of the applicable State rate and any applicable 
                  rate for the local jurisdiction into which the sale is 
                  made.
                      (D) Provide--
                              (i) adequate software and services to 
                          remote sellers and single and consolidated 
                          providers that identifies the applicable 
                          destination rate, including the State and local 
                          sales tax rate (if any), to be applied on sales 
                          sourced to the State, and
                              (ii) certification procedures for both 
                          single providers and consolidated providers to 
                          make software and services available to remote 
                          sellers, and hold such providers harmless for 
                          any errors or omissions as a result of relying 
                          on information provided by the State.
                      (E) Hold remote sellers using a single or 
                  consolidated provider harmless for any errors and 
                  omissions by that provider.
                      (F) Relieve remote sellers from liability to the 
                  State or locality for collection of the incorrect 
                  amount of sales or use tax, including any penalties or 
                  interest, if collection of the improper amount is the 
                  result of relying on information provided by the State.
                      (G) Provide remote sellers and single and 
                  consolidated providers with 30 days notice of a rate 
                  change by any locality in the State.
              (2) Treatment of local rate changes.--For purposes of this 
          subsection, local rate changes may only be effective on the 
          first day of a calendar quarter. Failure to provide notice 
          under paragraph (1)(G) shall require the State and locality to 
          hold the remote seller or single or consolidated provider 
          harmless for collecting tax at the immediately preceding 
          effective rate during the 30-day period. Each State must 
          provide updated rate information as part of the software and 
          services required by paragraph (1)(D).
      (c) Small Seller Exception.--A State shall be authorized to require 
  a remote seller, or a single or consolidated provider acting on behalf 
  of a remote seller, to collect sales or use tax under this Act if the 
  remote seller has gross annual receipts in total remote sales in the 
  United States in the preceding calendar year exceeding $500,000.   For 
  purposes of determining whether the threshold in this subsection is 
  met, the sales of all persons related within the meaning of subsections 
  (b) and (c) of section 267 or section 707(b)(1) of the Internal Revenue 
  Code of 1986 shall be aggregated.
  
  SEC. 4. TERMINATION OF AUTHORITY.
  
      The authority granted by this Act shall terminate on the date that 
  the highest court of competent jurisdiction makes a final determination 
  that the State no longer meets the requirements of this Act, and the 
  determination of such court is no longer subject to appeal.
  
  SEC. 5. LIMITATIONS.
  
      (a) In General.--Nothing in this Act shall be construed as--
              (1) subjecting a seller or any other person to franchise, 
          income, occupation, or any other type of taxes, other than 
          sales and use taxes,
              (2) affecting the application of such taxes, or
              (3) enlarging or reducing State authority to impose such 
          taxes.
      (b) No Effect on Nexus.--No obligation imposed by virtue of the 
  authority granted by this Act shall be considered in determining 
  whether a seller or any other person has a nexus with any State for any 
  tax purpose other than sales and use taxes.
      (c) Licensing and Regulatory Requirements.--Other than the 
  limitation set forth in subsection (a), and section 3, nothing in this 
  Act shall be construed as permitting or prohibiting a State from--
              (1) licensing or regulating any person,
              (2) requiring any person to qualify to transact intrastate 
          business,
              (3) subjecting any person to State taxes not related to the 
          sale of goods or services, or
              (4) exercising authority over matters of interstate 
          commerce.
      (d) No New Taxes.--Nothing in this Act shall be construed as 
  encouraging a State to impose sales and use taxes on any goods or 
  services not subject to taxation prior to the date of the enactment of 
  this Act.
      (e) Intrastate Sales.--The provisions of this Act shall only apply 
  to remote sales and shall not apply to intrastate sales or intrastate 
  sourcing rules. States granted authority under section 3(a) shall 
  comply with the intrastate provisions of the Streamlined Sales and Use 
  Tax Agreement.
  
  SEC. 6. DEFINITIONS AND SPECIAL RULES.
  
      In this Act:
              (1) Consolidated provider.--The term ``consolidated 
          provider'' means any person certified by a State who has the 
          rights and responsibilities for sales and use tax 
          administration, collection, remittance, and audits for 
          transactions serviced or processed for the sale of goods or 
          services made by remote sellers on an aggregated basis.
              (2) Locality; local.--The terms ``locality'' and ``local'' 
          refer to any political subdivision of a State.
              (3) Member state.--The term ``Member State''--
                      (A) means a Member State as that term is used under 
                  the Streamlined Sales and Use Tax Agreement as in 
                  effect on the date of the enactment of this Act, and
                      (B) does not include any associate member under the 
                  Streamlined Sales and Use Tax Agreement.
              (4) Person.--The term ``person'' means an individual, 
          trust, estate, fiduciary, partnership, corporation, limited 
          liability company, or other legal entity, and a State or local 
          government.
              (5) Remote sale.--The term ``remote sale'' means a sale of 
          goods or services attributed to a State with respect to which a 
          seller does not have adequate physical presence to establish 
          nexus under Quill Corp. v. North Dakota, 504 U.S. 298 (1992).
              (6) Remote seller.--The term ``remote seller'' means a 
          person that makes remote sales.
              (7) Single provider.--The term ``single provider'' means 
          any person certified by a State who has the rights and 
          responsibilities for sales and use tax administration, 
          collection, remittance, and audits for transactions serviced or 
          processed for the sale of goods or services made by remote 
          sellers.
              (8) Sourced.--For purposes of a State granted authority 
          under section 3(b), the location to which a remote sale is 
          sourced refers to the location where the item sold is received 
          by the purchaser, based on the location indicated by 
          instructions for delivery that the purchaser furnishes to the 
          seller. When no delivery location is specified, the remote sale 
          is sourced to the customer's address that is either known to 
          the seller or, if not known, obtained by the seller during the 
          consummation of the transaction, including the address of the 
          customer's payment instrument if no other address is available. 
          If an address is unknown and a billing address cannot be 
          obtained, the remote sale is sourced to the address of the 
          seller from which the remote sale was made. A State granted 
          authority under section 3(a) shall comply with the sourcing 
          provisions of the Streamlined Sales and Use Tax Agreement.
              (9) State.--The term ``State'' means each of the several 
          States, the District of Columbia, the Commonwealth of Puerto 
          Rico, Guam, American Samoa, the United States Virgin Islands, 
          the Commonwealth of the Northern Mariana Islands, and any other 
          territory or possession of the United States.
              (10) Streamlined sales and use tax agreement.--The term 
          ``Streamlined Sales and Use Tax Agreement'' means the multi-
          State agreement with that title adopted on November 12, 2002, 
          as in effect on the date of the enactment of this Act and as 
          further amended from time to time.
  
  SEC. 7. SEVERABILITY.
  
      If any provision of this Act or the application of such provision 
  to any person or circumstance is held to be unconstitutional, the 
  remainder of this Act and the application of the provisions of such to 
  any person or circumstance shall not be affected thereby.
target: Marketplace Fairness Act - Expresses the sense of Congress that states should be able to enforce their existing sales and use tax laws and to treat similar sales transactions equally, without regard to the manner in which the sale is transacted, and to collect, or decide not to collect, taxes that are owed under state law.
  
  Authorizes each member state under the Streamlined Sales and Use Tax Agreement (the multistate agreement for the administration and collection of sales and use taxes adopted on November 12, 2002) to require all sellers not qualifying for a small-seller exception (sellers with annual gross receipts in total U.S. remote sales of less than $500,000) to collect and remit sales and use taxes with respect to remote sales under provisions of the Agreement. Defines "remote sale" as a sale of goods or services attributed to a state with respect to which a seller does not have adequate physical presence to establish a nexus with the state.
  
  Allows a state that is not a member state under the Agreement to require sellers to collect and remit sales and use taxes with respect to remote sales sourced to such state if the state adopts and implements certain minimum simplification requirements, including: (1) providing a single state agency to administer all sales and use taxes, (2) establishing a uniform sales and use tax base, (3) relieving remote sellers from liability to the state or a locality for collection of the incorrect amount of sales or use tax based on information provided by the state, and (4) providing remote sellers 30 days' notice of a tax rate change by any locality in the state.
feat_title: A bill to restore States' sovereign rights to enforce State and local sales and use tax laws, and for other purposes.