Marketplace Fairness Act Communication Plan
Plan Owner
Carol Dedrick, TPS
Jenny Smith, TPS
Start Date
January 4, 2012
Purpose
This plan will identify the audiences and determine the strategies needed to inform
all parties of the implementation of the remote seller collection authority under
federal law.
Background
The Marketplace Fairness Act (S. 1832) addresses remote seller collection authority
under federal law.
Key components of bill:
 Provides SSUTA member states collection authority over those who make
retail sales into their state but don’t have a physical presence in the state.

Provides collection authority to states that are not SSUTA members once the
state has implemented the minimum simplification requirements.

Provides a small seller exception threshold: preceding calendar year gross US
remote sales of $500,000 or less.

Implementation
requirements
Establishes a federal framework for seller agents that would act on behalf of
sellers in collecting sales and use tax on a multi-state and in-state basis. These
agents are referred to as "consolidated providers” and “single providers." This
is similar to Certified Service Providers provided for under the Streamlined Sales
and Use Tax Agreement.

Requires that local sales tax rates change only on the first day of a calendar
quarter. Remote sellers and providers must be given 30 days notice of rate
changes.

Remote sellers are held harmless for errors or omissions made by their single
or consolidated based on information provided by the state.

Relieve remote sellers from liability for collection of the incorrect amount of
sales tax if it was caused by using information provided by the state.
There are two options to achieve collection authority
Streamline member option
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o
o
o
o
Grant of collection authority: Authority is granted to member states
compliant with the Streamlined Sales and Use Tax Agreement. Nothing
must be done.
Commencement of authority: the first day of a quarter at least 90 days
after enactment of the bill
Requires Streamlined simplifications: Under the bill, collection
authority is granted to states maintaining compliance with the
Streamlined Sales and Use Tax Agreement simplifications.
Sourcing: Allows member states to continue using the sourcing rules
under the Streamlined Sales and Use Tax Agreement.
Non streamline member option
o
o
o
o
Audiences
Grant of collection authority: Authority is granted on a State’s
implementation of the federal minimum simplifications (below).
Commencement of authority: 6 months after enacting the federal
minimum simplifications. Must be on the first day of a quarter
Federal minimum simplifications: Any state seeking collection authority
must provide for remote and/or all sellers:
 A uniform tax base
 Central state-level tax administration
 A single return filed with a state agency
 A single audit for state and local taxes
 Notice of local tax rate changes
 Adequate certified software and services to allow sellers or
their agents to collect tax, including rate information
 Hold harmless and relief of liability provisions
Sourcing: Sets up a federal destination-based sourcing regime for
remote sales
The communication activities are directed toward:
External audiences
 Any business subject to sales tax and does not have a physical presence (primarily
businesses selling online, by phone or via catalogues).
 Any Washington business the makes retail sales into states where it doesn’t have
a physical presence (web retailers, catalogue companies, TV/phone sales,
business to business, businesses that sell contracts)
 Individual consumers, business consumers
 Business associations (WRA, AWB, IBA, AWC, Chambers of Commerce, EDC,
Commerce, digital product assoc.)
 Tax professionals
 FTA, MTC
 Retail industry leaders association (RILA)
 National retail federation
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Direct marketing association
Local taxing jurisdictions
Marketplace sellers (Ebay, Amazon, Overstock, NewEgg, Google, Ubid, etc)
Other state Departments of Revenue
Consolidated service providers
Certified service providers (SSUTA)
Internal audiences
 Out of state employees (Out of state auditors may develop tax discovery
process)
 BLS (registration fees?)
 Business registration staff
 TI&E/TAA – way to identify businesses that register as a result of this bill
 TIC
 Operations and policy divisions
General key
messages
 States can now require sellers to collect their sales or use tax on retail sales in
their state regardless of whether the seller has physical nexus in that state.
Examples:
o If an online seller sells to a Washington buyer, the seller may be required to
collect and remit Washington sales tax whether the seller has nexus in WA
or not.
o If a furniture store in Oregon sells into Washington and delivers, through a
common carrier, shipping company, or their truck, the seller may be
required to collect and remit Washington sales tax.
 This law applies to all retail sales, including sales transacted through the mail,
over the phone, on the internet, and sales delivered from one state to another
by a shipping company or any other means. All retail sales include anything
subject to retail sales tax such as tangible personal property, digital products,
and retail services.
 If a seller makes $500,000 or less in annual gross remote US sales, they are
excluded from the requirement to collect sales/use tax. Sales in states where the
seller has a physical presence would be excluded from the calculation of annual
gross remote US sales.
 Don’t assume that just because a sale is not a taxable transaction in Washington,
that it isn’t a taxable transaction elsewhere.
 For Washington, collection authority begins effective (date). More information
can be found on dor.wa.gov/marketplace.
 Sellers interested in knowing which states have exercised their remote tax
collection authority can find a list at (FTA website).
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Definitions
Remote sales is a term that means a sale of goods or services attributed to a state
in which a seller does not have adequate physical nexus to establish nexus under
Quill Corp v. North Dakota, 504 U.s. 298 (1992).
SSUTA (Streamlined sales and use tax agreement) member states are states that
have been determined by the Streamlined Sales Tax Governing Board to have
changed their sales tax administration law so that they meet all of the
requirements set forth in the Agreement.
Targeted key
messages
Businesses making retail sales (in state and out of state)
 In-state businesses making sales outside of Washington:
o (Checklist) Do you make interstate sales that are subject to sales or use tax?
Did you sell more than $500K in gross remote US sales last year? (Define
remote sales.) (Other questions?) If yes, you should contact the state to
determine if you need to register in that state and collect and remit their
sales tax. If you are not required to register at this time, you need to revisit
the (FTA website?) to see if the state has begun to assert its collection
authority.
o (Central registration and registration with other state(s)—processes are in
development)
o For states that are members of SSUTA, you will find a list of taxable
products (taxability matrix) for each state at streamlinedsalestax.org. For
products that are not listed, contact the state directly. For a list of
Washington products subject to sales tax, go to dor.wa.gov/XXX.
o If you make remote sales into non-member states, contact each state to
determine if/how your sales are taxed.
o Don’t assume that just because a transaction is/is not taxed in Washington
that the same treatment applies in other states.
 Out-of-state businesses making sales into Washington:
o (Checklist) Do you make remote sales that are subject to sales or use tax in
Washington? Did you sell more than $500K in gross remote US sales last
year? (Define remote ssles.) (Other questions?) If yes, you must collect and
remit Washington sales tax unless an exception applies.
o If your total remote sales for 2011 was less than $500,000, you do not have
to collect Washington sales tax (small seller exception)
o Businesses need to revisit the FTA? website to see if states that were not
participating have begun to assert their collection authority.
o This federal legislation only affects sales and use tax collection. It does not
affect your obligation, if any, to pay other taxes in Washington.
o Don’t assume that just because a transaction is/is not taxed in your state,
the same treatment applies in Washington.
o For a list of taxable products in Washington, see the taxability matrix found
at dor.wa.gov/XXX
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Consumers (education effort using the media)
 Many businesses selling over the internet, through catalogs, over the phone,
etc., will now be collecting sales tax on purchases made in Washington State.
 These purchases have always required the payment of sales or use tax. This is
not a new tax.
 This bill makes it easier for your neighborhood stores to compete.
 This bill will generate additional revenues for the state and local government.
 Estimates of the state and local sales tax that will be collected are:
o 2011-2013 Biennium: $170.3 million state and local gain
o 2013-2015 Biennium: $483.0 million state and local gain
Local taxing jurisdictions
 This legislation will increase local sales tax revenues.
 This federal legislation only affects sales and use tax collection. It does not
affect nexus for purposes of any other tax or fee imposed at the state or local
level.
 This may affect mitigation payments.
Internal Audiences
 Many businesses will be registering with Washington directly or through central
registration.
 An indicator will be added to BRMS to businesses registering under the
Marketplace Fairness Act.
 TAA will be adding these businesses to our system.
 Consolidated service providers will be new for Revenue. Audit will develop
certification standards. Businesses using a CSP will have a unique indicator for
BRMS.
Non-streamlined member states
 Businesses in your state may have an obligation to collect sales tax on remote
sales. Please help your business community become aware of this potential
obligation.
Unresolved
issues
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Can the state impose registration fees?
How will we identify businesses that are remitting tax exclusively as a result of
this bill? (Indicator?)
“Agency” question regarding marketplace seller. Would they have an obligation
to collect taxes for sellers who don’t have nexus but exceed the small seller
threshold?
How are foreign sellers impacted? (Import exemption?)
Are there industries that we don’t tax that are taxed in other states? For
example, funeral services.
What about drop shipments? If a product is ordered by a person in state A from
a company in state B who then ships the product to state C and then sends the
bill to the customer’s billing address in state D, which state’s sales tax does the
company collect?
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What will the registration process be for WA businesses to register in other
states?
Will we be able to identify which businesses are remitting sales tax as a result of
Marketplace Fairness Act when providing information to local jurisdictions? Is
the fact that a business is reporting as a result of this law disclosable?
Will these businesses show up on the 105 screen in BRD?
Each state may have different registration requirements, e.g. minimum
thresholds for collecting sales tax, different remote sales thresholds or don’t
impose a sales tax. Some states my not meet the simplification requirements
under Marketplace Fairness or may not have asserted their authority to collect
the tax.
Action Items
#
Task
Task Owner
Due Date
1. Develop a media plan
Date
Completed
Notes
News release, editorial
boards, radio/TV
interviews
2. Send state tax info to FTA
for inclusion on the list
3. Partner with other states
for information sharing
4. Create a Special Notice
5. Create a marketplace
fairness web page—link
from home page
6. Develop Q&A for
consumers
7. Develop Q&A for
businesses
8. Listserv msgs
9. Develop messages for
Dept. publications
10. Social media (twitter,
facebook, rss)
11. My account alert
12. Secure message
Ensure their websites
include WA information
General Info,
Tax Facts, LSU
To businesses that take
the interstate sales
deduction?
13. WebEx seminar
14. Front office
posters/literature
15.
16.
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18.
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20.
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