Main Street Fairness Act

Recently, there has been significant activity in Congress related to sales tax nexus.

  • In July, Sen. Richard Durbin (D-Ill.) introduced the Main Street Fairness Act (the “Durbin Bill”), the first of three bills introduced this year that would allow states to collect sales taxes from remote sellers.
  • On October 13, 2011, Rep. Steve Womack (R-Ark.) and Rep. Jackie Speier (D-Cal.) introduced the Marketplace Equity Act of 2011 (the “Womack Bill”) that would allow states to impose a sales or use tax collection requirement on remote sellers with no physical presence in a state.
  • Yet another bill, the Marketplace Fairness Act, was introduced by Sen. Michael Enzi (R-Wyo.) on November 9 (the “Enzi Bill”). This bill appears to have bipartisan support, as senators on both sides of the aisle are co-sponsors: Sens. Durbin, Lamar Alexander (R-Tenn.) Tim Johnson (D-S.D.), John Boozman (R-Ark.), Jack Reed (D-R.I.), Roy Blunt (R-Miss.), Sheldon Whitehouse (D-R.I.), Bob Corker (R-Tenn.), and Mark Pryor (D-Ark.).
  • In contrast to these bills, Sens. Ron Wyden (D-Ore.) and Kelly Ayotte (R-N.H.) introduced a resolution opposing the enactment of “new burdensome or unfair” tax collection requirements on small Internet sellers. Sen. Res. 309 (Introduced Nov. 2, 2011).

Despite the resolution, Congress will seriously consider the three proposed acts. The three acts attempt to address the same issue through slightly different approaches. All three would allow states to collect tax from remote sellers if certain uniformity requirements are met. The uniformity requirements are similar, for the most part, but with some slight differences as discussed below.Continue Reading Nexus? Who Said Anything about Nexus?: A Summary of the Federal Nexus Bills

The goal of the recently introduced Main Street Fairness Act (H.R. 5660) is to establish fairness by treating similar sales transactions equally for purposes of sales and use tax. Opponents of the Bill, however, believe that if it becomes law, the result will be far from fair. The Bill authorizes “member states” of the Streamlined Sales and Use Tax Agreement to impose a use tax collection obligation on remote sellers even though they have not established a physical presence. Those opposing the Bill contend that it will result in extremely burdensome and costly compliance requirements on small, online retailers.Continue Reading Fair or Unfair? Main Street Fairness Act Faces Opposition