If the Remote Transactions Parity Act (RTPA) (H.R. 2775) has any chance of success, it is likely the U.S. Senate that offers the best, if not seemingly only, option for moving it forward, expressed Amber Talley, Legislative Director for Rep. Jason Chaffetz (R-Utah) on Nov. 4 at the American Institute of CPAs Fall Tax Division Meeting.
The RTPA is proposed as a destination sourcing model for sales tax, meaning the tax rate is based on the location of the consumer. RTPA’s stated purpose is to promote sales tax equality, or parity, if you will, amongst e-retailers and brick-and-mortar stores. This would allow Streamlined Sales and Use Tax Agreement member states, as well as nonmembers implementing certain requirements, to require sellers without a physical presence in a state to collect and remit sales and use taxes on sales occurring in such states. Like its predecessor, the Marketplace Fairness Act, states are given authority to tax business transactions occurring in other states.
Currently, the RTPA has 55 co-sponsors and both “public and quiet support” from members of the House Judiciary Committee, stated Talley. That support, however, does not lessen the challenges faced in the House, as House Judiciary Committee Chairman Robert Goodlatte (R-Va.) has proposed the Online Sales Simplification Act (OSSA), a draft alternative that prefers a hybrid-origin sourcing model that applies origin-based sourcing rules for remote (no physical presence) sales.
According to Talley, the best possibility of success for the RTPA would be to originate in the Senate and then sent to the House as part of a larger package deal, perhaps with the omnibus appropriations package. At this time, however, it remains unclear as to what avenue RTPA could move through the Senate, and although Talley expressed this as being the RTPA’s best option, she also stated, “I’m not even sure how realistic that is.”
Continue the discussion on Bloomberg BNA’s State Tax Group on LinkedIn: Should all online sales be taxed, and, if so, what is the best method for such taxation and collection?
For more information regarding proposed online sales tax bills, see Weekly State Tax Report articles by Jessica Watkins, Genie Nguyen, and Marc Heller.
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