There are many unintended consequences brewing in this bill.  We have identified some of them related to questions the bill does not address.  Please ask your representatives to answer the following questions:

  1. What measures protect my business from tax audits, court proceedings and penalties like tax liens imposed on my business by state departments of revenue where my  business has no physical presence?
  2. How will I be protected over time from politicians in a different state that I cannot vote for or against?  I feel like I will have taxation but not representation in other states.
  3. Can states audit me for my customer data and then retroactively (i.e., prior to the enactment) audit the citizens in these states for “unpaid” Use Taxes?  As you may know, California can perform audits reaching back six years.  Can California, or any other state, ask me for historical customer purchasing data and then audit my customers based on this data?
  4. What is the enforcement process for overseas sellers with no presence in the United States?  Are they required to comply with state tax collection duties?
  5. If states make changes to the Streamlined Sales Tax Agreement after the enactment an Internet Sales tax, do those changes become law?
  6. The bill says that states may not impose requirements on remote sellers that they do not impose on non-remote sellers.  Currently, many states give special state sales tax deals for businesses with in-state presence, while offering remote sellers no such deal.  Since this practice is giving preferential treatment to in-state sellers in relation to the collection and remittance of sales taxes, will this be prohibited under the Marketplace Fairness Act?
  7. Will there be any limitation on states giving special sales tax breaks to large in-state businesses while forcing strictly out-of-state businesses with no presence to comply?
  8. Under the Streamlined Sales Tax Agreement states agreed that sales price was the cost that a consumer actually paid for an item.  However, Nebraska wants to claim that “sales price” is the gross price before discounts. Is there anything in the bill that prevents this type of excessive taxation from occurring in Nebraska or other states?  From what I understand the minimum requirements of the bill do not prevent this type of theoretical taxing from occurring.
  9. If a company also sells digital goods, how will the bill affect digital goods and services?  Without a clear structure for digital goods taxation, these types of goods could fall under multiple taxation schemes. Does the bill protect digital goods from multiple taxation?
  10. In terms of digital goods, like apps and music, who is responsible for remitting the sales tax: my businesses or an app store or sales platform?
  11. Does the bill require simple, flat taxes for low cost and digital goods?  Some states, like Maryland have different sales tax rules for goods that are priced under one dollar.
    For example: Effective January 3, 2008, the Maryland sales and use tax rate is 6 percent, as follows:
  • 1 cent on each sale where the taxable price is 20 cents.
  • 2 cents if the taxable price is at least 21 cents but less than 34 cents.
  • 3 cents if the taxable price is at least 34 cents but less than 51 cents.
  • 4 cents if the taxable price is at least 51 cents but less that 67 cents.
  • 5 cents if the taxable price is at least 67 cents but less than 84 cents.
  • 6 cents if the taxable price is at least 84 cents.
  • On each sale where the taxable price exceeds $1.00, the tax is 6 cents on each exact dollar plus:
  • 1 cent if the excess over an exact dollar is at least 1 cent but less than 17 cents.
  • 2 cents if the excess over an exact dollar is at least 17 cents but less than 34 cents.
  • 3 cents if the excess over an exact dollar is at least 34 cents but less than 51 cents.
  • 4 cents if the excess over an exact dollar is at least 51 cents but less than 67 cents.
  • 5 cents if the excess over an exact dollar is at least 67 cents but less than 84 cents.
  • 6 cents if the excess over an exact dollar is at least 84 cents.
  • If Maryland, or states wishing to follow suit, do not comply with Streamlined Sales Tax Agreement or the minimum simplification requirements included in the bill, can they tax low-cost goods in this way?

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