For over 50 years, Bloomberg BNA’s renowned flagship daily news service, Daily Tax Report® has helped leading practitioners and policymakers stay on the cutting edge of taxation and...
May 9 — The Vermont Legislature gave a final thumbs up to a measure that would impose use tax notification requirements on out-of-state vendors.
The provision was in an omnibus bill (H. 873) that contained numerous tax and policy provisions. Language pertaining to a fuel tax, home health care and other subjects caused the final bill language to be decided by a House-Senate conference committee.
The Senate passed the final bill May 6 by voice vote, and the House passed it by a vote of 86-55.
H. 873, which is expected to be signed by Gov. Peter Shumlin (D), expands on the notification and collection requirements of earlier versions of the bill .
It is similar to a first-in-the-nation Colorado law that the U.S. Court of Appeals for the Tenth Circuit upheld in February (Direct Mktg. Ass'n v. Brohl, 10th Cir., No. 12-01175, 2/22/16).
The Tenth Circuit ruled that Colorado's law was constitutional, although the decision is expected to be appealed to the U.S. Supreme Court (66 DTR K-2, 4/6/16).
H. 873 is aimed at large, out-of-state retailers who do business in Vermont and don't collect the state's 6 percent sales tax.
Under the bill, non-collecting vendors who have sold property or services in Vermont in the previous year would be required to notify Vermont residents who purchased more than $500 in products or services in the previous year by Jan. 31 that they are obligated to pay sales or use taxes on nonexempt purchasers. The notice would have to state the amount of purchases made, and failure to notify purchasers would result in a $5 penalty per purchaser.
Under the conference report, purchasers would have to be notified by July 1, 2017, or first day of the first quarter after the sales and use tax reporting requirements at issue in DMA are implemented in Colorado, whichever happens first.
Non-collecting vendors who fail to provide these notices would be fined $10 per failure.
Non-collecting vendors who did more than $100,000 in sales in Vermont during the previous year also would need to file an annual statement with the Vermont Department of Taxes. The statement would list all purchasers and show how much they paid for purchases that year. Failure to notify the department would result in a $10 fine per purchaser.
The bill would expand the definition of vendor to include those who made $100,000 or more in sales outside of Vermont or engaged in 200 or more individual transactions within the preceding 12 months in which taxes are due.
The conference report takes into account the possibility that another landmark legal case, Quill Corp. v. North Dakota, 504 U.S. 298 (1992), could be overturned. The U.S. Supreme Court in Quill limited the collection of sales and use tax to vendors with a physical presence in the state.
According to a conference committee report summary, any collection of taxes would have to happen by either July 1, 2017, or when Quill is overturned, whichever is later. If Quill is no longer good law, the collection would take place beginning on the first day of the first quarter after it is overturned, the report said.
To contact the reporter on this story: Adrianne Appel in Boston at firstname.lastname@example.org
To contact the editor responsible for this story: Ryan Tuck at email@example.com
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)