Sales Tax Group Still Pushing for Congressional Intervention

Ryan Prete Washington Reporter Ryan C. Tuck Washington Deputy News Director

By Ryan Prete

Federal digital sales tax legislation is necessary for state and seller collection uniformity, according to a Streamlined Sales Tax Governing Board executive.

Hours after President Donald Trump signed a federal omnibus spending bill without a digital tax provision that would allow for states to impose sales tax collection obligations on vendors lacking an in-state physical presence, Craig Johnson, executive director of the Streamlined Sales Tax Governing Board Inc. (SSTGB) said the board still “maintains that federal legislation is the right answer for uniformity.”

Johnson said during a March 23 conference call that the board wouldn’t yet speculate on South Dakota v. Wayfair—a case pending before the U.S. Supreme Court that directly challenges Quill Corp. v. North Dakota, which prohibits states from imposing sales tax collection obligations on vendors lacking an in-state physical presence. But he said that federal legislation was the best path to uniformity in collection and remittance of sales tax, a chief goal of the board.

Oral arguments in South Dakota v. Wayfair are scheduled for April 17.

In terms of federal legislation, Johnson was referring to two long-proposed measures: the Remote Transactions Parity Act of 2017 (H.R. 2193) (RTPA) and the Marketplace Fairness Act of 2017 (S.976) (MFA). Both bills seek to undo Quill’s 26-year-old rule, and last ditch efforts to address the issue via the omnibus bill fell short.

Johnson said he is working on securing a panel of tax professional who attend the April oral arguments to speak during the SSTGB’s spring meeting May 1-3 in Jackson, Wyo.

Streamlined’s Viability

Johnson later spoke on a March 23 panel at the National Conference of State Legislatures’ (NCSL) Task Force on State and Local Taxation meeting in Washington, where he affirmed that the Streamlined Sales Tax (SST) initiative would “absolutely still be viable if Quill is undone.”

“Uniformity and simplification are products of the Streamlined Sales Tax, and we hope the U.S. Supreme Court will see that during oral arguments in April,” Johnson said.

Johnson spoke alongside Max Behlke, director of budget and tax at the NCSL. Behlke also affirmed the contributions of SST.

“Streamlined Sales Tax is a testament that states can and will come together,” Behlke said.

South Dakota state Sen. Deb Peters (R), who is also president of the NCSL’s executive committee, said the NCSL is working alongside the SSTGB to develop guidelines for online sales tax collection in the event that the high court over turns Quill.

Peters said the guidelines are for small businesses and will prevent the chaos of a free-for-all scenario should Quill be undone.

Complications ‘Overblown’

During the panel, Johnson spoke against arguments that remote seller compliance would be unfeasible in a post- Quill world.

“I personally think that fears of compliance complications are overblown,” Johnson said. “In my experience, sellers do not sign up with Streamlined Sales Tax and then quit because they say it’s too expensive. They have continually stayed with the program.”

Johnson said the SSTGB has seen an increase in voluntary seller participation in every month since 2012.

“We today have the means to register all remote retailers right now,” Johnson said. “Regardless of the Supreme Court’s ruling in Wayfair, the Streamlined Sales Tax Governing Board and states will continue to work towards uniformity.”

More than 3,800 voluntary retailers collect and remit sales and use taxes in Streamlined Sales Tax member states, Johnson said.

To contact the reporter on this story: Ryan Prete in Washington at rprete@bloombergtax.com

To contact the editor responsible for this story: Ryan C. Tuck at rtuck@bloombergtax.com

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