Small Business Exemption in Online Sales Tax Bill Should Be Increased, AICPA Says

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By Marc Heller

Sept. 13 --The American Institute of Certified Public Accountants urged lawmakers to revise legislation aimed at boosting collection of sales tax on Internet-based purchases, including exempting more retailers from collecting tax.

The AICPA, which lobbies on behalf of certified public accountants, wrote Sept. 10 to the chairmen and ranking members of the House Ways and Means Committee, the Senate Finance Committee and the Judiciary committees of both chambers, suggesting lawmakers allow retailers with “substantially” more than $1 million in annual remote sales--the threshold written into the Marketplace Fairness Act--to not collect sales tax.

That was one of several recommendations the AICPA made for the legislation (S. 743, S. 336 and H.R. 684), which would let states compel out-of-state online retailers to collect sales tax on their behalf. Consumers are already supposed to pay sales tax to their state of residence, typically by declaring purchases on state income tax returns. Few comply, say lobbyists on both sides of the issue.

“The AICPA believes that the MFA should significantly simplify the tax reporting and determination process for remote sellers, and by extension, for all sellers required to collect and remit sales and use taxes,” the AICPA wrote. “Congress can best achieve this result by making it easier for remote sellers to comply with the new collection and remittance requirements.”

The organization said it has no position on the legislation and believes its recommendations would help retailers comply.

The AICPA wrote to Reps. Dave Camp (R-Mich.) and Bob Goodlatte (R-Va.), chairmen of the House Ways and Means and Judiciary committees, as well as to those panels' ranking Democrats, Reps. Sander Levin (D-Mich.) and John Conyers (D-Mich.); the letter also went to Sens. Max Baucus (D-Mont.) and Patrick Leahy (D-Vt.), chairmen of the Senate Finance and Judiciary committees, as well as Sens. Orrin Hatch (R-Utah) and Charles Grassley (D-Iowa), the committees' ranking Republicans.

The Ways and Means Committee doesn't have jurisdiction on the issue unless it becomes part of a comprehensive tax code revision--a possibility that Baucus, who opposes the bill, has raised for the Finance Committee even though the Marketplace Fairness Act passed the Senate in May (88 DTR G-3, 5/7/13). Similarly, the House bill is awaiting action in the House Judiciary Committee, but the Senate Judiciary Committee has had no role. The Senate passed its version after Senate Majority Leader Harry Reid (D-Nev.) bypassed Baucus's committee through a procedural move.

To contact the reporter on this story: Marc Heller in Washington at

To contact the editor responsible for this story: Cheryl Saenz at

Text of the AICPA letter is in TaxCore.

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