A bill introduced by Congress will seek to put the brakes on the ability of states to require remote sellers to collect sales tax on transactions completed through the internet. The bill is in response to the June Supreme Court ruling that requires remote sellers that do business with residents of the state but do not maintain a physical presence in the state to collect the sales tax due.
Jim Sensenbrenner, a Republican representative from Wisconsin, introduced the legislation and says it will clarify requirements concerning internet collection of sales tax. The bill will not permit sales tax to be required of online retailers before the start of the new year. The bill also stipulates that no retroactive sales taxation is allowed.
Sensenbrenner explains that the bipartisan bill is necessary to bring order to the chaotic free-for-all that is possible as a result of the Supreme Court's Wayfair ruling. The representative says that retailers doing business online are in need of clarity and stability. Sensenbrenner goes on to say that the bill is intended to protect online entrepreneurs from unreasonable regulatory burdens.
The June ruling by the Supreme Court overturned a decades-old precedent that made sales tax collections void for businesses doing business with customers living in states where the business maintained no physical location.
The decision by the Supreme Court made it possible for billions of dollars of additional sales tax revenue to be collected by states in the country. Several states have already begun the taxation process with more planning to do so on October 1.
The National Conference of State Legislatures is a bipartisan group that stands in opposition to the bill championed by Sensenbrenner. The group characterizes the bill as an 'unwanted intrusion' on state's rights. The group also says that if passed, the bill would allow online sellers a continued competitive advantage over brick and mortar businesses.The bipartisan bill also requires states to simplify the sales tax collection process for online retailers by developing an interstate compact.